To understand how to invest your money in the best way it is necessary to start acquiring some fundamental concepts, in order to minimize the risk and maximize the result of your investments.
This is not the usual article with general advice for those who start investing, for beginners, with advice such as “Diversify the portfolio: do not focus everything on the same instrument”, “Set the goal of your investment”, “Assess the risks of investment”: but, as the title says, this is the next step because I try to give some useful tips to evaluate a specific investment.
The 10 things to know before deciding on an investment
Prevention is the best defense weapon, so analyze well the investment that is proposed to you following this decalogue.
- the investment time frame, i.e. until it actually commits you
- the specific sectors and issuers in which you are investing
- more details on the financial statements and corporate strategies of the chosen issuers
- the price of the security, with reference to historical trend and future targets
- the liquidity of the financial product and notes on its liquidity, i.e. realization times
- the quality of the quotation (how many market makers?) and the distribution chain
- the percentage between amount invested and total portfolio, commensurate with the level of risk
- optimized tax management of the financial product, between managed and managed deposits
- total annual costs and those related to any clauses on an exit before the deadline
- coherence analysis of the investment risk profile on the overall portfolio
Follow these tips to avoid being caught unprepared and to always be aware of what allocation to give to your savings flows with a reasoned investment.