Investment is one of the ways to accumulate wealth for a long time. Earning rewards through work is only a part of wealth accumulation. We need to use more investment to accelerate this process. For investment, there is no universal truth, but only accumulated knowledge and valuable experience from failure. The best way to invest is to choose a way that suits you. So, before you start investing, consider these issues clearly.
Investment style
When it comes to investment style, there are two camps in the investment world: active investment and passive investment. If we focus on long-term investment rather than pursuing short-term returns, then both investment methods have their own advantages. However, your lifestyle, investment budget, future planning and risk tolerance may make you prefer one of them.
When it comes to investment style, there are two camps in the investment world: active investment and passive investment. If we focus on long-term investment rather than pursuing short-term returns, then both investment methods have their own advantages. However, your lifestyle, investment budget, future planning and risk tolerance may make you prefer one of them.
When it comes to investment style, there are two camps in the investment world: active investment and passive investment. If we focus on long-term investment rather than pursuing short-term returns, then both investment methods have their own advantages. However, your lifestyle, investment budget, future planning and risk tolerance may make you prefer one of them.
Investment budget
The most important thing in the investment budget is not how much money you want to invest at the beginning, but to ensure that you have made financial preparations for investment, and that you will often invest, similar to the habit of saving. A very important step before investment is to establish an emergency fund, that is, to reserve funds available for daily life at any time. Because all investments have a certain degree of risk, if you are forced to sell these targets when you are locked in, it is equivalent to falling before dawn. In other words, we must invest with "spare money". Most financial experts recommend that you keep enough living expenses for six months before investing.
Risk tolerance
No one can guarantee that all investments are successful. Every type of investment has a corresponding risk level, and the risk is usually positively related to the return. For ordinary investors, it is important to find a perfect balance between maximizing capital returns and acceptable risk levels. Investors can realize risk management by adjusting the proportion of risk assets they hold, and select products suitable for them according to their risk preferences.
For novice investors, choosing funds can effectively avoid the risk of black swans in individual stocks, which is a better investment method. Select the type of fund according to your own investment style, and determine the investment proportion of each fund according to your risk preference. Generally speaking, bond fund is a relatively conservative low-risk variety, while equity fund is a high-risk variety. By establishing a diversified investment portfolio, we can maximize the potential return while keeping the investment risk level within a reasonable range.
What is good for investment?
It is difficult to have a specific standard for the selection of investment varieties, but we can give a reasonable suggestion from the perspective of risk tolerance. If your risk tolerance is relatively high and you have the time and willingness to research and analyze, then stock investment or active fund may be the best choice. If your risk tolerance is weak, but you want to get higher returns than bank savings, bond funds or index funds may be a more appropriate choice.
Conclusion
Investment is a kind of knowledge, which is worthy of our lifelong research and exploration; Investment is like a long run. It's not how fast you start, but who can reach the end; Investment is even more a kind of cultivation, which is based on persistence and self defeat.
