Generating profit from a financial investment has always attracted interest from people at large. Some people might see it as a necessary step to secure their future while other might see it as an interesting challenge or something new to be experienced. However, no matter what perspective you might have on financial investment, check out the following principles to make sure your financial investment is carried out effectively.
1 – Start today
As soon as you have either an intention or a plan to start your own investment, start learning as much as you can about the investment solution or investment area you aim for. If you put the research process on hold just because you are afraid that you don’t have enough money or because of its risky nature, you will never find out which investment solution or area would be suitable for you and how to carry it out effectively. The amount of money you have to invest is not always the most important matter. It is more important to start from a small step and use it as a foundation for the next steps. Putting things on hold can also mean wasting potential opportunities.
2 – Build a reasonable expenses plan
It would be challenging to maintain a financial investment if you don’t have a certain amount of money dedicated to your investment every month. Hence, before starting your own investment, build your own monthly expenses plan and dedicate a certain amount of money to use for your investment. Determine the priorities of each of your expenses to see if you can eliminate any unnecessary costs.
3 – Be patient
Sometimes it takes a good amount of time for an investment to generate profit. This is why patience is required for any investor. A calm and patient state of mind will also come in handy during market fluctuations, as freaking out would not help you to fix any problem.
4 – Keep practicing
Thinking and observing will not generate any profit. That’s why you need to start and continue practicing. Practice observing, evaluating and analyzing different investment channels and solutions. This practice will help you to draw your own useful findings for the upcoming investment process. Monitoring the fluctuations of the market as well as different investment channels will also help you to find the suitable investment solution for yourself.
5 – Distribute potential risks
To cope with the ups and downs of the market, successful investors would distribute their money into different areas. It has been proven that diversification reduces risks but does not affect the average performance.
Investors can reduce risks by owning more than one type of investment, such as: bonds, stocks, gold, real estate, etc.
One of the best solutions to effectively distribute potential risks is through an open-end fund. Open-end funds use investors’ money to buy small investments from several organizations. By owning a part of the open-end fund, you will have a small investment in several different investments. This will also help to minimize the damage if one investment goes bankrupt.
6 – Find a reputable investment management company
In today’s modern world, several investment management companies have been established to help investors limit risks and enhance profits from their investments. These companies have a high level of expertise and experience that will be beneficial for you during your investment process. For instance, VinaCapital is one of the most outstanding investment management companies with more than 15 years of experience in Vietnam, and currently manage funds across multiple asset classes, including public and private equity, fixed income, real estate, venture capital, and managed accounts. They offer multiple funds with different risk and return profiles that meet a range of investor needs. Find out more about VinaCapital here.
Above are 6 standard principles you should use as reference before starting your own investment. Hopefully you can be able to use this to build an effective investment process for yourself. You can find out more about the open-end fund managed by VinaCapital and can be joined via your Timo app here.