December 8, 2022 // How to Properly Invest Your Money:

How to invest your money with certified financial planners

Contrary to popular belief, investments are not restricted to ultra-wealthy people and Wall Street suits. In fact, investing the right way is one of the most effective means opted by ordinary people to become millionaires. Finding how to invest money properly may seem daunting at first glance, but it’s not as difficult as you might think, especially when you acquire assistance from certified financial planners.

Discover the ways you can invest your money, what you need to consider beforehand, and how these factors can secure your investments. 

What to consider before investing your money?

When starting to invest, you must determine how much help you require and how much you can afford to invest. Many people want to invest less time and effort needed to learn investing. So entrusting your money to certified financial planners can be your best bet. Next, the amount of money you are willing to invest is up to you, and it is unique for everyone.

Having an emergency fund in place

An essential step in this regard is to establish an emergency fund. It basically refers to cash set aside and available for instant withdrawal. All kinds of investments, whether real estate, stocks, or mutual funds, involve a certain level of risk. And the last thing you will want is to be in a position where you will have to sell or divest them in times of crisis. Therefore, the exigency fund will be your safety net to tackle such situations.

Understanding risk tolerance

Before investing your money, you must understand that only some investments may be successful. Each investment has its own risk, but it is mainly correlated with returns. So, as an investor, you must strike a balance between increasing the returns on investment and determining a comfortable level of risk. Even within the wider classification of bonds and stocks, you will find a huge difference in risks.

Finding the best kind of investment

The best type of investment depends on your investment goals, and there is no one-size-fits-all answer to this. If you have a comparatively higher risk tolerance along with the desire and time to research individual stocks, then it is the best means for you. When you have a low-risk tolerance but looking for higher returns compared to savings accounts, then bond funds are appropriate for you.

Defining the time horizon

It refers to the time you will be holding the investment to reach your financial target. The time horizon is determined based on the financial goal. For example, investments for buying a car are going to have a shorter time horizon than developing a retirement corpus. Time horizon can be classified under short-term, intermediate-term, or long-term.

For a shorter time horizon, certified financial planners suggest opting for high-growth stocks with high returns. But this is not suitable for intermediate or long-term time horizons where these stocks may suggest high risk. A mixed venture of stocks and bonds is appropriate for an intermediate portfolio. On the other hand, long-term is meant for investments in stocks since it gives the time to recover from a loss and allows the stock to mature.

CTA: ​​Playcheques is Alberta’s solution to astute and efficient financial planning. With our team of professionals who are eager to advise our clients with educated and helpful advice, we strive to be the best financial planners in Calgary! For more information about our financial planner’s services at PlayCheques Financial Solutions, visit our website at https://www.playcheques.com, or call us at 403 837 9344!