Investing involves making a decision to allocate money to an activity that will provide compensation, or putting off consumption today to preserve funds and receive a benefit in the future.
It involves decisions about the time, risk and reward the investor is prepared to accept. Investment classes can vary from little or no risk to high risk and the rate of return can be expected to increase as the investment becomes more risky.
The major investment asset classes are:
• Fixed interest
Elements to consider when investing include:
• Financing those investments
• Timing of the market
• Attitude to risk
• Time horizon
The investor also has to consider how much time they can devote to their investment, how often can they monitor its progress and research. This might affect whether you buy property directly or invest in a trust or fund that manages a portfolio of properties on your behalf.
Another consideration is whether to pay a fee to a fund manager which would provide you access to a bigger portfolio of assets and having them manage it.
The advisory industry is growing as more investors choose to opt for professional advice so they are aware of investment options, taxation issues and how to plan for a secure future.