Making Informed Investment Choices

Much like planning a trip, the key to successful investing is having the right information, a well-constructed plan and, often, the right advice. You don’t need a PhD in history to visit ancient Rome, but reading a travel brochure before your trip will give you information to help you decide how much time to spend there. Once you know the basics, a travel advisor can suggest where to stay and eat and which places of interest to visit.

On your financial journey, knowing some basics will help you ask the right questions, obtain the best advice and feel confident about your decisions.

Here are some key principles that will help you manage your investments effectively over time:

• Choose your investments based on when you expect to need the money.

• Spread money among different investments (called diversifying your portfolio) to soften the impact of any major changes in the market.

• Make sure you understand the full costs of your investments.

• If you need to withdraw money from a mutual fund earlier than planned, take it from a fund that does not impose a penalty for early withdrawal.

• Once a year or anytime you experience a major life change, review your investment choices and make changes if appropriate.

If you need assistance applying these principles to your situation, speak to a financial advisor.

Source: www.newscanda.com

(Image credit: www.moneyadviceservice.org.uk)