Basics of Investment
Let us educate you about building your portfolio.
What is Investing?
There’s a limit to how much we can work and earn from it, not to mention that it takes away from our leisure time. This is where investment comes in—putting your money to work for you.
Let your funds earn on your behalf, giving you the opportunity to work, sleep, read, or socialize with friends. Simply put, making your money work for you maximizes your earning potential.
- Develop a Portfolio Strategy
- Why Invest?
- Understanding your Needs
- Investment Objectives
- Time Frame
- Risk Profile
- SECP Investor Education
Based on your objectives, investment horizon and risk profile, we will help you identify an optimal investment strategy and the ideal mix of assets most suitable for achieving your goals.
If you have more time to achieve your objectives, you’re more likely to invest a larger portion of your money in riskier investments.
Obviously, to earn more money. However, investing is becoming less of a luxury and more of a necessity. For the average person, investing is the only way they can retire while still maintaining their standard of living.
By planning ahead you can ensure financial stability when you retire.
Even though investors are always trying to make money, they come from diverse backgrounds and have different needs. Therefore investment solutions and methods should be personalized for each investor.
We will explore three main factors that determine the optimal path for an investor:
Investors have a few primary objectives: safety of capital, regular /stream of income, or capital appreciation amongst others. These objectives depend on a person’s age, stage or position in life, and personal circumstances.
A 65-year-old widow living off her retirement savings is far more interested in preserving the value of investments than a 33-year-old business executive.
The widow needs income from her investments to survive, she cannot risk losing her investment, However the young executive has time on his side and can therefore take more risk.
On the other hand, if you are about to retire, then you may opt for a more conservative approach as the opportunity to recover losses on your investments is limited in case of any losses and therefore it is critical to be safe.
When investing, you need to know how much volatility you can stand to see in your return on investments.
Figuring this out is difficult, but there is some truth to an old investing maxim: you’ve taken on too much risk when you can’t sleep at night because you worry about your investments.
Ask your investment advisor to conduct a thorough risk profiling for you to help make more informed investment decisions.
Types of Investment
The term ‘bond’ is commonly used to refer to any form of investment founded on debt. When you purchase a bond, you are lending out your money to a company or the government. In return, they agree to give you interest on your money and eventually pay you back the amount you lent them.
The main attraction of bonds is their relative safety. If you are buying bonds from a stable government, your investment is virtually guaranteed (or “risk-free” in investing terminology). However due to the safety and stability there is low risk and low potential return compared to other investment instruments
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