Some things to consider before you invest
There are a few things you should consider when choosing how and where to invest your capital:
Risk
What level of risk are you comfortable with? Risk is linked to return and generally the more risk with a particular investment, the greater the possible return. Some people are very uncomfortable with sudden, short-term fluctuations in the value of their investments. Others are more willing to accept short-term fluctuations with the expectation that long-term returns may be higher.
Return Expectation
Investors will generally expect to get the best returns they can, for a given level of risk. The key is to be realistic. On the basis of long-term historic performance figures, the returns for each asset class will differ.
Time Horizon
What length of time do you want to invest for? Whether you have a short, medium or long-term investment horizon will impact on the option you choose. Often the investment objective will determine the duration e.g. investing for education on behalf of young children is long-term, whereas investing for a deposit on a house would typically be more short-term.
Access
What access do you require to your funds? A requirement for short-term access to funds will also impact on your choice. Some products are best suited to investors who do not require access to their funds, who can afford to leave their funds invested for 5 years or more.
