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By Carol Leresche

Investment Success for Beginners

Investing creates money for your future!  Are you interested in investing but unsure where to start or scared of the unknown?  Investing is not only for those who watch every move on the stock market or read investment magazines or only for the wealthy. 

Don’t be intimated, you can start delving into the investment world, on a small scale by following a few basic investing rules.

Define Your Goals

You firstly need to establish what your investing goals are; define your goals.  This is key and will determine the length of the investment you require. 

For example, if you want to purchase a vehicle and this is the reason for your investment then your goal by investment standards is considered a short-term investment, which you would most probably be able to obtain in approximately 3 years.  In this case you would then consider a money market account or bonds.

However, if you are investing to ensure sufficient funds for your children’s university, which is in approximately 10 years’ time.  This is considered a long-term goal and you could then look into equity investment. 

In equity investing the risk reduces the longer you have the investment and will more than likely yield a higher return.  Long term investments need time to grow.  In the investing world, you will hear the term ‘compounding interest’, this means  you start earning money on the money your investments have already earned.

Invest with Consistency

Once you have defined your goals, establish the amount that you can invest every month and set up a debit order.  Prosperous investing is about consistency; once the debit order is set up, you do not have to worry about what the markets are doing, this way your are doing what is called ‘rand-cost averaging’.  Rand-cost averaging is an effective strategy to reduce risk; ultimately the idea is to buy shares when they are cheaper; but timing the market exactly right is not possible, hence rand-cost averaging. 

In other words, rand-cost averaging protects the value or worth of your money.

Once you have automated your contribution, that monthly payment concern is taken care of and your money will start working for you.

Get the Best Investment Advice

If you are fortunate enough to be in position to invest a larger sum of money you need to consider spreading your investment across different industries and or businesses to alleviate the risks.    Unit trusts are largely considered a diversified choice. 

However, at Morebo our Financial Advisors are specialists in this area and will guide you accordingly and assist with building a diverse portfolio for you.

Last but not least, emotions play a big role in investing.  You must not let your investing decisions be made on a whim or emotional decision.  There may be times when the market is turbulent, you however need to stay the course, stick to your investment plan. 

During these uncertain times contact your Morebo Financial Advisor who will give you clarity on the situation unfolding in the marketplace.

Please email Morebo on info@morebo.co.za should you need financial advice.

Wishing you all the best on your investing road to wealth and good fortune.

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