Guide to investment. Part 2

Before you even dive into any investment, you have to understand some of the financial jargons. You need to understand the language and you need to fully understand the concepts and thesis. At the end of the day, it’s your money we are talking about. You can avoid making losses in investments. It’s the same with a student who is sitting for an exam; the student will only pass the exam if he/she studied hard.

Let me first explain about insurance funds, unit trust, mutual funds, bond funds and cash funds first. I will cover more on stocks, shares and property in the later part. I will need you to understand the ‘simpler’ kind of investments before you go into other types of investments which require you to have more in depth knowledge. As you can see, choosing an investment is not an easy job. You will need to have a lot of patience.

In investments, you can reduce the risk and increase the returns if you make due diligence. There are a few things that you must do before you even start putting your money into any investments. You need to know, what kind of fund you are investing; what are the characteristics, what are the projected returns, who are the fund managers, what kind of industry and most importantly, at what stage the investment is at; infancy?

1) What kind of investment?
Insurance fund, unit trust, mutual funds, bond funds or cash fund.

2) What are the characteristics?
Equities? Balanced? Conservative? Geographical? Sector? Portfolio? Fixed?

3) What are the projected returns?
Guaranteed? Compounded interest?

4) Who are the fund managers?
Reputable? Credible? Net asset?

5) What kind of industry?
Technology? Life sciences? Marine time? Transport? Food? Beverage?

6) What stage?
Infancy? Booming? Adult?


These are just some of the facts that you need to know. There are other factors that you must also consider in your investment process. The guidelines here are just simple basic steps and they are meant for illustration purposes only. There are no recommendations made in this article.