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Understanding investments.



When you commit your money to an endeavor expecting to obtain an income or profit that is investing. We spend so many hours working and sacrifice so much, but few of us get to enjoy the fruits of our labor. We all like to enjoy our money, and will end up splurging on new clothes, take vacations or eat out in fancy restaurants, yet, that money could be put to better use by investing in one or more investment avenues that could yield a great return in the future. Investment experts will tell you that you should know how to prioritize your money.

There are many types of investment opportunities available in the market, some focus on buying shares while others choose stocks. It is important to have a suitable strategy in mind when deciding on your investment Journey. You need to look at what you hope to gain financially, how much time you are allocating to the investment, and what your risk appetite is. It is really an individual preference on how many investment strategies they will adapt, some may be comfortable with just one but others use a number of different strategies towards achieving their financial goals.

 Investment is not static. They are heavily dependent on the conditions of the market whether economic, socio-political or even religious because all this can have an impact on what is happening in the financial market. For example, during situations of political unrest, the economy does not do well generally.  You need to have the right mindset, sometimes in investment, you make money, other times you will not. You may want to engage the services of a fund manager or an investment specialist to guide you on the right path. This does not, however, mean that you should not have a good understanding of what is happening, you will gain a lot by keeping an eye on what is happening in the investment markets especially in the areas that you have a stake in.

Warren Buffet a well-known investor has some advice for people who are planning to invest. He has 3 strategies that have worked very well for him. The first is, invest in your area of expertise. If you understand the business, you’ll be able to know how the business makes money and how it is able to sustain profitability over the long term. By having an understanding of the business, you will be able to have an idea about how successful or not, your investment we will be.

  His second piece of advice is to look at your investment as owning a part of the business. Do not focus too much on stock movements which tend to fluctuate and you will enjoy stress-free investment. His third piece of advice is that you should figure out your margin of safety. This means that your enterprise should be lower than the value estimate of the company. You should be able to get more value than what you initially pay for.

It is time to stop working hard and start working smart. This means that you should let your money work as hard as you do so that you’re able to enjoy the fruits of your labor in the future.