Choosing the Right Investment Product for You

There are a lot of different investment products available for people with different investment needs. Fund managers and firms offering financial services offer a diverse array of investment options that would suit each individual's investment needs. These products range from the more conservative, fixed-earnings investments to the more aggressive ventures such as stocks and everything else in between. Choosing from the different investment options can be overwhelming for first time investors, but luckily, there are ways to determine which of the many investment products can be a suitable choice.



Be Aware of Your Financial Status

When choosing investment products, there are a lot of things that you have to consider. One of them is how much money you have to invest and how long you intend to invest for. Some investment options allow you make regular contributions, while others require you to put in the lump sum. As for the duration of your investments, a lot of investment portfolios tie your money up for a specific period of time. Some of them allow you to terminate your investment early, but a penalty or termination fee is charged. If you feel that you would need to access your money in the near future, you should choose one that allows you to withdraw your funds anytime you want without having to pay a fee.

Know Your Risk Profile

An investor's risk profile is also important. A person's risk profile measures how much of a risk an individual is willing to take with his money. Fund managers often ask their clients to answer a questionnaire to determine their risk profile before recommending anything. This way, they would know whether the investor is willing to go along with the ups and downs of the stock market or whether a low-risk, fixed income investment is a better choice. It's not advisable to jump into an investment without first assessing your risk profile because this could leave you with the unnecessary stress of worrying about the risks of your investment. Knowing your limitations before placing your money in an investment portfolio would help you sleep better at night while your money is working for you.

Investment portfolios aren't one-size-fits-all. Some investments may be good for certain people, but yield disastrous results for others. It is important that we are well-informed about our options to be able to make sound financial decisions. If you're still unsure about where and how much to invest, it is best to consult a financial adviser for advice and information about the different investment products available.

By Stephen Waller