Ask yourself these three questions before investing

Julie Brownlee, Fsp Invest, 30 Sep. 2015

Tags: investing, investment decisions, investing in shares, assets, how to decide what to invest in,

Investing can be a nerve racking experience.

Are you making the best decision with your cash? What if you lose your investment?

By investing, you take on risk, but this risk should pay off over the long-term as your see your investment grow.

So before investing, how can you ensure you make the best decision for you?

Read on to find out…

Before investing, do this…

Before investing in any asset, you should ask yourself the following three questions first, says David Merkel in

Question 1:
How long do you want to invest in the asset for? Is it for the short-term, medium-term or long-term?

Question 2:
How promising is the future of the asset you’re buying? Are there better assets to invest in than this one you’re looking at? Make sure you include cash as a comparable asset class.

Question 3:
How safe is the asset you want to invest in? Is it likely to perform as long as you want to stay invested in it?

How to make your investing decision

If you can answer the above questions about an asset you want to invest in, you should go ahead. If you can’t answer the questions favourably for the asset in question, it’s time to move onto other prospective investments.

You need to ensure you always weigh up any investment opportunities carefully before parting with your cash.

Yes there are always risks that you won’t make the right decision, but by asking yourself the above three questions, you should remove the investments that aren’t likely to perform the way you want them to.

So there you have it. Three questions to ask yourself before investing.

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