Things you need to know before investing
By Nipapun Poonsateansup CFP® Dependent Financial Planner
Believe that many people will have heard this “One who knows the enemy and knows himself will not be in danger in a hundred battles.” The one who said this is Sun Tzu who was a Chinese general, military strategist, writer, and philosopher who lived in the Eastern Zhou period of ancient China. This means that 'no matter what you do, we need to know ourselves and our opponents very well. No matter what the situation, we will not be defeated by another.
We can apply this term to investing as well. By 'knowing us' is knowing ourselves, know what our investment goal is, how long do we can invest, and how much risk can we accept. To 'know-them' is to recognize various types of investment assets, what are the risks and returns, does they meet our investment goal. Also have knowledge and understanding of the economy that may affect our investment. That means before we decide to invest, we need to know the following;
The ability to accept risk will tell what kind of assets we can invest in. While willingness to risk is said are we suitable for that type of asset. For example, young people can accept at high risk, so they can invest in risky assets such as stock and equity funds. However, if they are not willing to risk so much, it would be better to invest in lower risk assets such as bonds, fixed income bonds. So, know ourselves before investing, like how much we can accept and be willing to risk or lose. We will be able to select the most appropriate investment for ourselves.
In addition, the important thing that investors should have is the commitment. To be successful in anything, we are the most important factor. Even if the investment plan is good, the lack of commitment, lack of discipline and lack of patience to save investment will reach the goal hardly. So, when you set your own financial goals, you must get on with the plan. Do not procrastinate] because you may not reach the intended purpose.
After the investment started, the investment plan should be assessed and reviewed regularly, such as every 6 months or 12 months or when there are major events that may affect the return on investment. For example, the stock market volatility or interest rate adjustments. To improve our investment plan in line with the current situation. In summary, if we are planning investment well, discipline in action plan and plan is reviewed regularly, opportunity to achieve financial success as intended is not too far.