Managing an Investment

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From Editor: This is a guest article by Andrew Black

Do you have savings? It is not enough that you keep it in your bank account. While it is true that it would grow through the interest imposed, it is just logical that bank deposit interest rates simply are too small. Why not attain the full potential of your money by investing it properly and effectively? Managing an investment is not as risky and as difficult as you may think.

If you decide to just keep your savings in your bank account, it may grow by about 4% to 6% per year. If the current inflation rate is from 6% to 8%, you should realize that your bank savings account would lose value over time. It is much more ideal if your savings could grow by more than 9% annually. You have no idea just how much it could possibly grow if you put it somewhere else.

Your savings could grow by as much as double in just a short period if you would invest it well. Managing an investment is a skill or expertise you should learn. Thus, you have to be familiar in investment management. There are four basic steps to the process.

1. Setting your investment objectiveBefore you proceed to manage your investment, you should of course set your own objectives. Of course, you intend to make your money grow, but how much and how long? Be realistic when setting your investment goals. You may start by aiming to grow your investment by 10% within six months.

2. Establish your own investment policy

It is not wise to invest all of your savings into a single investment product. Establishing your own investment policy involves logically allocating your resources to control and avoid risks. You may have to assess the current economic environment before deciding where and how much to invest. For instance, you may decide to invest 75% of your savings in stocks and the other 25% in bonds. Then, set your goals and limitations when it comes to investing into specified products.

3. Have a portfolio strategy

Set your own investment strategies. For instance, if you invest in stocks, which shares from what industries would you buy? You may have a goal to immediately sell your shares if those grow by 20%. It may take a short while or several months. The strategy would protect your investment against risks.

4. Measuring and assessing investment performance

Every now and then, you should monitor and evaluate how your investment is doing. You have to check if you are currently on track to attain your investment objectives. You could do this by calculating any growth of your investment, considering the time or duration. If your target growth is not likely to be attained or if the investment is not growing after some time, you may have to pull it out and transfer it to a better investment product or venue.Managing an investment may not have to require an MBA or financial expertise. You could manage your own investments if you were realistic and optimistic about the market. There are many investment products out there. All you need to know is to do some research before deciding to take any.

About Author: Andrew has been writing on personal finance for the last 2 years. He is a trained advisor and currently works for a private lender, where he specialises in mortgage refinancing solutions.

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