WHAT INVESTING IS NOT
Investing is not a get-rich-quick scheme and it is not gambling. Gambling is putting your money at risk by betting on a random outcome with the hope that you might win more money.
Wise investors don’t leave it to chance. They have a plan and commit money only when they have a reasonable expectation of profit. Yes, there is still risk and there are often no guarantees, but investing should be more than hoping luck is on your side.
WHY YOU NEED TO BE INVOLVED
The bottom line is that it’s your money and who will care more about your money than you? No matter who’s actually handling your investments, only you will know if you are comfortable with the investment choices. And it’s up to you to stay on top of your investments to make sure they keep working for you.
KNOW WHO YOU ARE
Each investment has its own characteristics and some investments will be better suited to you than others. When you understand who you are as an investor, it will be easier to make the choices that are right for you.
CMA regulations ensure that financial institutions understand your investment objectives and risk tolerance, as well as the risks involved in the financial products or securities being recommended to you.
HOW MUCH RISK ARE YOU WILLING TO TAKE?
Your ability to take on risk is important to finding out what works for you. In investing, the higher the potential return, the higher the risk. There’s no such thing as a high return, risk-free investment. If you want higher returns, you have to be prepared to accept the risks that go along with them.
Your tolerance for risk may depend on:
– What is more important to you—keeping your money safe or seeking higher growth.
– When you need your money.
– How you react to the ups and down of the markets.
– If you have any debts.
– If you have any other sources of income to fall back on.