If you know little to nothing, how are you going to do about the investment firm?
To become well informed, you should read up on the basics. find out what a stock, bond or a mutual fund is, and what are the differences between these three financial products, and variables. Read books on financing and investing.
Talk to savvy investors, watch video, and live presentations. Once you understand the differences and the risks entailed investing in each particular vehicle, then you can go forward with confidence.
Now, you can go to the second phase of learning about the investment. Gain experience, by investing in equities of smaller companies, and learn from your mistakes and successes. However, find out first what type of investor you are. Here are a few tips to help you find the answers.
By going about your business to invest in, have a game plan and define specific objectives. The answers to these questions will be valuable guidelines for you in your business to invest your funds.
o What is your timetable for investing?
o What are the sectors of industries are you interested to invest in?
o What is the amount of funds that you can use safely in the investment in order to achieve your goals?
o Have you considered your short-term financial needs or goals?
o do you plan to live of these investments in your retirement years?
Determine your investment style. Are you a risk taker? Or do you like steady gains? Consider this thought, you will be able to sleep at night, knowing your investment is decreasing and will take a long period of time before it increases? Or if you prefer to hand your funds to a fund manager? You like a minimum of risk to invest your funds? Consider the type of risk taker that you are, for it will help you pick the financial vehicles for investing in.
What is the length of time you want to devote to investing in equities? Is it only 15 minutes a day? Or do you find consider it the height of entertainment to spend 7 to 14 hours per week, looking over financial statements and debating the merits of these stocks.
Carefully consider the answers to these questions. If you know what type of investor you are, you can play to your strengths, and minimize risk to the funds that you invest with.