The 10 best tips for choosing an investment

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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.

evaluate an investment

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.

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DISCLAIMER - Finance Drops is a blog that deals with topics related to personal finance, economic growth and savings management. It does not offer financial advice, the analyzes reported are to be considered general contents for information purposes. Finance Drops articles that talk about money cannot guarantee certain results because the possibilities vary according to the ability and economic situation of the reader. Finance Drops, therefore, cannot guarantee the success of the suggested strategies and does not assume responsibility for imprudent choices made on the basis of an incorrect perception of the contents of these pages. Risk Warning: Past performance reported in the articles cannot guarantee future results. Furthermore, products that allow access to leveraged instruments may involve a high degree of risk of loss of capital. All the solutions mentioned offer truly effective protective measures to manage risk, but sometimes it is possible to lose more than you invested.