After learning how saving and investing can bring you additional source of income and can secure your future needs, you might have decided to start investing. But unfortunately you do not know what kind of investment is right for you. You do not know if you are going to start investing in stocks, or do cost-averaging on mutual funds, or you might have thought of real-estate investments or even do a full-time in forex trading. So, how do you choose what investment is the right one for you?
Use Aya's Investment Triangle
One of Citisec Online's investment advocate, Aya Laraya has invented a tool that you can use to determine which of the different investment vehicles is the most suitable for you. He called it Aya's Investment Triangle. The three points of this triangle is Knowledge, Time and Money. You can evaluate on how much do you have of these three before you decide what kind of investment you are going to get. Let's discuss each one in detail.
Do you have the Knowledge?
One component in Ara Laraya's Investment Triangle is Knowledge. How much do you know about the investment you are going to have? In terms of stock investment, knowledge is important especially if you are doing Fundamental Analysis over Technical Analysis. You need to be aware of the company's financial standings through readings news and checking on financial documents. If you are the guy that likes to dig in to these stuffs, then stock investment might be the one for you.
Do you have the Time?
Some people just have the time to monitor and play with their investments full-time while some do not. Are you the one who doesn't have a regular 8 to 5 job and can monitor investments during the scheduled trading hours? If you have answered yes, then stock trading or forex trading can be your investment of choice. Stock price changes a lot of times during the trading hours and to take earnings from it, you should be able to check and monitor your buy and sell transactions in as real-time as possible. If you can dedicate this time during the day, then your choice of investment can be stock trading or forex trading.
Do you have the Money?
Investors are not equal in terms of knowledge, time and especially money. Some start at the minimum amount needed to start investing in vehicles like stocks or mutual funds while some have a pretty big amount of money to invest. If you are this kind of investor, then you might want to check on investing in real-estate properties. You can buy properties and then sell it later for a higher price earning a profit. Take note that this kind of investment also requires knowledge.
I don't have Knowledge and Time and Money
We have discussed about how each component from the triangle can help you decide what investment should you choose but some people have little or no knowledge, time and money. If you are this kind of investor, then you might want to check on investing in mutual funds. Mutual funds doesn't require much knowledge because there will be a fund manager who do the strategy on where to invest the pooled amount. You don't also need to have dedicated time since you don't monitor the changes in price per share at real-time. And you also don't need to have big sum of money since you only need to invest a little more than 100 dollars or at least 5,000 pesos for most of the mutual fund companies. If you are a soon-to-be investors and doesn't have an idea on what kind of investment to choose among many kinds of investment vehicles, I hope Aya's Investment Triangle had helped you determine on what investment is the ideal for you in terms of how knowledgeable are you in that investment, how much time can you allocate to monitor and perform transactions and how much money are you willing to invest.
So, what have you chosen? Share by commenting below.
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