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Finance/Saving Tips Make your investments work for you in Dubai
Finance/Saving Tips Make your investments work for you in Dubai
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| Written by Administrator | |
| Wednesday, 09 September 2009 00:00 | |
Make your investments work for you in DubaiThe importance of saving on a regular basis and then investing that money to grow can never be overemphasized. More often, despite their best intentions, people land up making major mistakes while investing and put their life savings in trouble. Here are some common investment mistakes to avoid in order to reap the fruits on your hard earned savings: - Do not trust the financial expert blindly: If you are one of those investors who feels it is better to get professional investment advise then be sure to check the adviser's references beforehand in addition to their fee structure. You should have the knowledge that an adviser who works on commission basis has more incentive to buy and sell and not to make a profit for you. Also, you must research potential investment instruments and review very diligently the suggestions made by the broker /adviser. - Do not spread your investment too thin: Even though diversifying a portfolio is a good investment strategy, do not spread your investment too thin. For example, if you divide Dh100,000 in 100 different companies, each of those companies can have a small impact on your portfolio. It could be possible that the brokerage fees and other transaction costs may even exceed the profit from your investments. Diversify your portfolio by all means, but choose a few good options to invest. - Do not invest all your money in one go: William Hewitt, District Sales Manager, Nexus, told Emirates Business: "It's also important to remember that investors don't have to invest a lump sum in one go. They can drip feed their money over time through a regular plan." - Always have a clear investment strategy: New investors should start by making a list of short- and long-term goals, and then assess the level of risk they are willing take and then decide how much they want to invest in each type of asset class. - Once you have invested you must stick to your investment goals: Hewitt advised: "Investors should stay focused on their long-term goals, as the reasons for investing will in many cases be unchanged. When markets fall, many investors lose confidence and either stop investing new money or redeem their holdings. Avoid doing that." - Any attempt to time the market is fraught with risk so do not attempt that: Hewitt said: "No one knows for sure when a market has reached the bottom or top of a trend – there is no clear signal. An investor who waits until things look more positive, risks missing the period when the most significant gains can be made. Conversely, if you sell an investment because the markets are falling and the news is full of gloomy predictions about the economy, you may find you have come out of the market at exactly the wrong time." In addition, frequent trading can lead to high transaction costs that can eat into your income. Always rely on an effective combination of patience, planning, and research to make your investments work for you. Do not compromise on your savings and always keep some funds aside as savings in order to secure your future. business24-7 |
