How to Invest - Guide for Self-Directed Investors
”Education is the most powerful weapon which you can use to change world” – Nelson Mandela
The best investment you can do is one in yourself: education will empower your mind and help you to live up to your dreams. Below you find some essentials that you should be aware about before putting your money at risk.
This guide is dedicated to self-directed investors. Our mission is to empower you with tools and knowledge that you need in order to guide you to master your hard-earned money.
The following chapter focuses on the basics of investing. It will look at the different investments and products that exist, as understanding your investments is fundamental to achieve a successful outcome.
Once you understand the fundamental relation between risk and reward, you must define how much investment risk you can take. This is determined by two factors. Firstly, your ability to take risk, hence, how much can you afford losing considering your financial situation and lifestyle. Secondly, your willingness to take risk, which means how much you can afford losing without facing sleepless nights.
When investing you should always have in mind the objective that you are trying to reach with it. You may want to generate income to finance your basic needs, prepare for retirement or simply invest to make more money.
When investing you can reach your objectives through different strategies. Some investors might prefer to invest and forget about it, others like to take on a more active role. Also in regard of the investment products, objectives might be reached by investing in single stocks, Exchange Traded Funds or mutual funds.
Building an investment portfolio is the trickiest, but also the most fun part, when investing. It brings together all the elements that you have learned in the previous chapters: based on your risk tolerance and investment style, you aim to build a portfolio capable of reaching your objective.