Investment Basics

If you’re new to the world of investing, a licensed investment planning advisor at CDSPI Advisory Services will clearly explain all the aspects you need to consider when selecting investments and creating an investment strategy. Just call us. If you wish, you can gain an understanding of some basic investment concepts by reading the information below.

Determine Your Investment Style

There isn’t one right way to invest. But it is possible to devise an investment strategy that’s best suited to you.

For instance, if you have a number of years before you need to reach your financial goals, it’s likely that you can take a more aggressive approach to investing — by choosing higher risk investments, since you will have more time to ride out any temporary downs in the markets. On the other hand, someone who requires the use of his or her investment funds within a few years should probably follow a more conservative route, choosing more low-risk, guaranteed investments to preserve as much capital as possible.

Your current financial situation, your net worth (assets minus liabilities), your current income level, and the portion you spend on expenses will have some bearing on your risk tolerance. Generally, the more established you are financially, the more tolerant you can be about ups and downs in your investment returns.

Your investment knowledge will also have a bearing on your tolerance for risk. For example, the more knowledgeable you are about market trends, the more comfortable you may be with certain types of investments at a given time.

Once you have a sense of your tolerance for investment risk, you can explore what types of investments are appropriate for you.

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