Factors that should influence how you invest

Investment is a game of chess that requires in depth thought

10:45 06 January 2014

Emotions and gut feelings have no place in investment. If you follow the aforementioned styles then you are in for a world of disappointment and loss.  The following article highlights what you should know about investment direction.

Discovery is a time of full disclosure

It is important that you expose yourself to an advisor who will be thorough with you. Advisors use information they collect to come up with strategies that impact on your investment strategy. If you don’t find one who is thorough in his examination of you, you might end up with the short end of the stick as far as your investment is concerned.

Timing is critical in investment decisions

If you are in that period where you have a consistent stream of income, you can be magnanimous with the risks you want to take. If you are in the retirement phase, it is wise recourse to be careful with your investment decisions.

Know your liquidity needs

It is important that you identify those investment funds which have surrender charges. If you want money as early as possible avoid such funds as they might not have daily liquidity.

Going all in or holding out?

It is important to know where you stand in terms of long-term investment. Going big on bets can be very harmful to you if it does not work out the way you wanted. Think of your investment strategy in terms of a marathon focusing on the long term gains.

Do not use irrelevant benchmarks to compare yourself

Benchmarks like FTSE represent one asset class. In general, benchmarks comparisons are meaningless as diversified investment portfolios leave little room for comparisons of strategies.

For most people looking to invest wisely, they follow the best tips out there. However, tips are useless if they are not backed up with prudent financial planning with the assistance of qualified professional.