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How to choose an investment for your time frame
1) What are the time restrictions?One of the first things that you should consider is the type of time restrictions for your potential investments.Do you think that you will need any of this investment money in the near future?Do you have another back -up supply of money available, in case of an emergency?In other words, do you have an emergency supply of money which is NOT your investment money?If you do not have a type of backup supply of money, you may want to consider a shorter time frame - you never know when your investment time frame will become shorter due to a need for emergency funds!
3) Are you willing to make a risk?With investments, there is always an element of chance and risk.What is your risk tolerance?Often people consider the risk of their weights in conjunction with their time frame.For example, does your time frame allow you to take more risks?Or, do you find that your time frame more constricting?If you have a low risk tolerance and do not have a very long time frame, then you may want to stick to types of short term investments and other types of bonds.However, if you have a higher risk tolerance, you might want to give more weight to your stocks and invest more. As you can see, there are a lot of things that you need to consider when you are choosing an investment for your time frame.You need to think about the time restrictions that you have, emergency funds other than your investment money, the risks involved, and the types of penalties you could receive.When thinking about all of these different considerations, you will be better prepared to choose an investment that is right for you.However, even after making these considerations and looking at different investments, it is still a good idea to consult with a financial advisor or manager regarding your investments.Remember, the more consultation about investments that you receive - the better off you are!This way, you will be better prepared to MAKE money on your investments instead of losing money!Good luck in your future investing! |
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