In the previous post I've tried to shed the light on some basic investment tips. Well for those who didn't follow me yet, I'm studying management and want to share with you what I've learned during these years, I hope it would be helpful for all of you .
For those who didn't see it , go and check it please and give me your opinions about it.Thanks :)
This time I will highlight some factors that are major in the investment field and that influence highly the decision making and the success rate of any project.
A. THE MARKET :
The investment is closely related to the market you are willing to invest in.As a matter of fact, the investor must always have a clear vision on what's going on in his surrounding, which means, to follow the macroeconomic outlook which could lead to many opportunities in the market that should be considered as a priority before making any decision regarding to the project. Thus, exploring changes and being prepared are essential in the investment project.
B. NATURE OF INVESTMENT:
Generally speaking, investment projects by the utilization of resources in order to increase the income, or the purchase of assets to build up wealth in the long term . But let's focus on investment from another perspective, whether it's a physical investment, financial or an investment fund.These three types are different based on their form or the risk taken in them:
⦁ Financial investments : Putting an amount of money in assets in order to sell it later when the price goes up.( they carry high market liquidity). And the risk is high, considering the fluctuation in the market.
⦁ Physical investments: Tangible in nature and generally used for production of goods and services. The risk is lower compared to financial investment.
⦁ Investment fund: Is a way of investing money along with other investors in order to take benefit from the advantages realized by working together. Moreover, the investors would benefit from economies of scale, which means declining the fixed unit cost supported by them.The risk is lower, because it is based on a risk-sharing strategy.
C. FINANCING OF INVESTMENT:
The investment could be funded by many ways and generally,the price comes with the high quality, but the most important thing for a young investor with limited funds is how to minimize the risk as much as possible .Because unlike those who are experienced in investment fields and have many sources of income, young investors need a good start in the investment domain.So, mutual funds or exchange-traded funds highly recommended tools for them, considering the share of the investment financing weight between investors.
D. RISK:
None can deny the fact that any investment is accompanied with a risk rate. And many investors hesitate to start their projects due to the negative outcome that might be inevitable. So the first thing to start with is to check all the risk forms and analyse them step by step to come up with a conclusion that must be taken into consideration withing the investment project process.
In the next article I'll explain the different risk forms, their influence on the investment decision making and the different ways to handle it.
If you liked this post resteem it so other people could see it and take benefit from it. Thanks in advance, and good luck with your investment plan !
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