2 essential aspects to get you on the right investment track

Fsp Invest, 28 Oct. 2013

Tags: investment, risk, risk tolerance, stockbroker, broker, choosing a broker, investing, how to start investing,

You can’t expect your portfolio to perform well if you haven’t sorted out the basics first. Before you go any further, you need to know what your tolerance to risk is. And you need the right broker to invest on your behalf. Read on to find out two essential aspects to get you on the right investment track…

When it comes to getting your investing on the right track, there are a couple of crucial aspects that you need to consider, Keith Fitz-Gerald in Money Morning US explains...

By sorting you these two aspects, you will be in a better position to concentrate on your portfolio and making your money work for you.

Figure out your risk tolerance

Not everybody wants to skydive. Some people are content with low-risk, low-return investments.

Some people love the thrill of risking it all for the chance their money will triple or more. The vision of high returns can easily seduce some people. But, take a little time to think about your risk tolerance.

Think about when you'll need the money you’re investing. Think about how comfortable you are with risk. And then, make sure your broker knows exactly what your risk tolerance is.

One way to get a good gauge on your risk tolerance is to use one of the risk tolerance tools that are available online. A simple Google search should turn up dozens of results.

Check them out to determine how risky you're willing to be.

Find the right broker

When you pick your broker, take everything they say with a grain of salt. Try to find someone you trust - someone you feel comfortable with and someone who isn't going to push you into any investment that you don't feel comfortable with.

When scouting brokers, never gloss over an asterisk. The fine print it refers to could mean that you're signing up for higher fees than you realise.

Don't be afraid to call the brokerage up and ask every question you have. Sometimes brokers talk like doctors or computer repairmen in that they have their own language they strategically use to intimidate their customers.

Keep them in check by writing down every question you have and checking them off only if you understand their answer completely.

So there you have it, two essential aspects to get you on the right investment track.

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