Tuesday, August 30, 2011

10 rules for investing

Given that investing your money takes time and attention (just think of the rest of the time you have used to save money) and 10 rules are not enough, here are some tips to follow:

1) easy money do not exist. If today makes it a safe investment to 3% and someone offers you a safe investment that makes 6% do not trust: o the investment is not so sure (more than expected return = risk), or the proposer may be in bad faith (read scam )

2) it is better to put your eggs in many baskets rather than in one basket, so it’s better to diversify your investment, respecting their needs and not taking risks he does not feel to run. Diversification is essential when you invest in shares. Diversification does not mean, however, have some ‘money to the post office and a bit’ of money to the Savings Bank, and even have some ‘Fiat ordinary shares and a bit’ of Fiat savings: it is to have a good mix of bonds different rate (fixed rate and variable rate) and over time, equity funds in Europe, America and Japan, etc..

3) Before submitting a product please read the information sheet or regulation. In the case of doubts stall and ask for an explanation. You are entitled to have these documents before signing, not just after. In any event, even if you signed and read the documents you find things that were said, there is a right of termination.

4) Careful attention to the person offering the investment. Today, the categories are many companies offering investments: bank employees, postal employees, financial advisors, insurance agents. Within a category and between categories can be people with a different experience, different financial knowledge, different degrees of transparency and fairness to the customer.

Try to understand what kind of person in front of you. Prefer people who explain in detail the product without just say “do that is good” or “makes it more than others.” Beware of those who give vague answers to your questions, or those who seek to avoid the issues of cost (entrance fees and management for the funds, the loading for insurance policies) or any other penalties related to output (especially for insurance ). Remember also that financial planners and insurance agents are paid a percentage of sales.

5) Maximum clarity on the costs of products, especially for insurance policies. Information now is to avoid unpleasant surprises tomorrow

6) Be wary of us puts you in a hurry to sign in or sign up for no reason. Products such as mutual funds or traditional insurance policies are always available.

7) Beware of those who earnestly wants to push a product, or risk to life, does not feel right for you: if you do not want to risk capital, a partner that pushes you to the equity investment is not professional

 8) the fact that last year has made the investment x 4% does not mean mathematically that this year will make 4%, depending on the type of product

9) see how the discussion develops. If this is your first time you talk to proponents of investment or one of the first times, it is important that your needs are clearly perceived. If the other party rather than talk with you about how much money you invest, commit to what you want them, which risks can bear, what are your plans (eg, home purchase or car) now offers a product that shows you how perfect you send it away: How do you know which product is best for you if you do not know what you want? Probably trying to sell the product which earns more

10) Do not be afraid to go into a bank and you have no customers to request information about their investment products, in order to make a comparison. For the bank you are a potential new client, we spend a lot of time. Other useful channel for more information and the Internet (also for understanding performance, cost, time constraints).

Friends and acquaintances may unfortunately be an untrusted source, since we have no guarantee that they are informed properly or that they understood what he was told.
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