Making investment decisions can be tricky- on the one hand, you want to make sure you are doing everything right and not making any mistakes. But on the other hand, you also want to be decisive and not second-guess yourself. So, what should a person do? Here are a few things to consider before making investment decisions to help you strike the right balance. 10 Things to consider before making investment decisions Market Research Investing is an important decision, but making the right one is even more important. Before making any investment, it is important to do some market research. This will help you understand the current market and what companies are worth investing in. Understanding your investment goals and how the market will respond to your proposed ventures is also important. Doing proper market research will help you make sound investment decisions that will result in long-term success. Read Saving vs. Investing Money: Know the Pros and Cons Investment Goal Investment is the key to a successful future. However, not all investments are created equal, and choosing the right one can be difficult. Before making any investment, consider your goal for the money. Are you looking to make a quick buck, or are you planning to invest for the long term? If you are looking to invest for the long term, you should consider your funds' long-term storage needs. The goals you set for yourself will help you decide what exactly you want to invest in. Different investments offer different levels of stability and potential for growth, so it is important to choose one that meets your needs. Read How to Choose the Right Business Idea? Level of Risk When considering any investment, it is important to consider the level of risk involved. Investments with a high level of risk are typically more volatile, which could lead to larger losses if the investment fails. Conversely, investments with a low level of risk are typically less volatile, leading to smaller gains and less potential for loss. It is important to decide which level of risk is best for you and your goals. There are a variety of ways to measure risk and determine which investments are right for you. You may talk with industry experts or even use a risk calculator to know the potential risk level. There are numerous online calculators that can tell you what the risk is for various investments, debts, or events. Read How Does Inflation Affect Business, Professionals, Mass People in Bangladesh?

Investment is one of the best ways to increase your wealth. It’s a proven means to generate more money as well as a source of passive income for the investor. Compared to savings, the investment provides a higher return. However, a higher return comes with its own set of risks. If you aren’t careful enough, you might end up losing more money than making through investment. So how do you make sure your investment is safe? What are the things to be considered before investing? Let's find out. Why are you investing? Before anything else, you should find out the reason for investment. Savings are something that can work as your financial cushion. Investments are a bit different considering your money gets locked up for a considerable period. As a result, you should carefully evaluate whether you’ll have any immediate need for the money. You should also assess whether you want to make a short-term investment or a long-term one. Based on your investment period and the risk factors, your return will vary. Therefore you should be clear on your goals and strategies to make sure of the correct investment decision. Read: Investment Opportunities in Bangladesh amid Pandemic What should an investor consider when making an investment? Life stage Where are you in your life right now? This is an important factor many people ignore when investing. If you are a young professional with a steady income source, it becomes easier to take risks. However, if you are someone at a late stage of your life, or you are planning on child education support or retirement, it becomes increasingly difficult to make risk-related decisions. All of it depends on your commitments. Usually, it's ideal to invest at a young age where you will have sufficient time to turn things around in case anything goes south. The same doesn’t hold for someone who is investing their life’s saving at an old age. Read Investment Guide: How Bangladeshi Youths Can Invest money and Create Wealth? Time frame We have already talked about the ideal stage of your life for investment. But what is the ideal period for investment? Truth is, there is no fixed answer for this. You can invest for a long time or for a short time. The choice is yours. However, each short-term and long-term investment has its own perks. Long-term investments tend to generate a higher return. Short-term investments will give you profit much faster. If you are looking for long-term investment opportunities, you should consider stock and mutual funds. These are the best long-term investments out there. But if it’s short-term that you’re looking for, a fixed deposit can be a good option. Read Saving vs. Investing Money: Know the Pros and Cons Income or increment of capital Some people use investment as a steady source of income. Some invest to increase their existing capital. While both of these are meant to generate money for you, there are some subtle differences between them. Investments are through and through associated with risks. So if you are looking for a steady income source, the common investment strategies might not be a good option. You can invest in MIP, MIS, or fixed deposit as it will guarantee a return after a fixed interval. And if growing the existing wealth is your priority, you can consider investing in equity or real estate. Read:Real Estate Business in Bangladesh is booming again overcoming the brunt of Pandemic Return on your risk Depending on your investment strategy, risks will vary. There are countless streams of investment that will provide you with more return than the usual interest on your savings. However, the more the return there are, the merrier the risk will be. If you are someone willing to play in a high-risk scenario, you can consider investing in equity-related investment strategies. If you want a quick return on your investment, there are high-risk bonds. As long as you are willing to play on the market fluctuations, you can be sure to make a good return on your investment. Read: F-commerce in Bangladesh: Problems and Prospects State of taxation Many people don’t consider the tax burden that comes along with investment. As you start receiving a return on your investment, the tax will start to add up on your investment. However, there are different tax waivers and rebates associated with investments. The only downside of the waiver is that there is a minimum lock-in period of investment. Depending on the investment strategy, the lock-in period can be as high as 10 years. So you should be careful before choosing an investment strategy as it can effectively lock you out of your capital for a long time. Read Angel Investment 101: Is It the Right Track for Your Startup? Liquidity of the investment In layman’s terms, ‘liquidity’ is the state of how soon an asset can be sold off in the market in exchange for a good return. Risks on investment are directly associated with the liquidity level of any asset. The more the liquidity, the lesser the risk, and the lesser is the return. If you are someone looking for an easy investment scheme without having to worry much about capital loss, then you should invest in high liquidity assets. But if you are a risk-taker looking to make a good profit out of your investment, then you should go for low liquidity assets. Read Investing in startups second innings of Sachin Tendulkar's life Emergence Capital The last factor here isn’t directly related to investment; rather it’s a precautionary measure for you. Investments are high-risk games no matter how you look at them. There’s no guarantee that you will end up losing all your investments in a matter of hours or days. There might be situations where you will have an emergency need for funds but you won't be able to access them because of lock-in periods or losses. The ideal approach would be to set up an emergency capital fund before you embark on investments. This will not only cushion you against any investment-related drawbacks but will also be a source of capital for future use. No matter how you use it, an emergency fund can always be your plan B. Read:ToguMogu: One Stop Solution for Bangladeshi Parents Bottom Line Investments aren’t for everyone. But if you are willing to take the risk, you can be sure to make a good return out of it. But for that, you will need careful planning and consider your options. In this article, we have discussed the key factors to consider before making investment decisions. We hope our discussion will help you to lay the groundwork for your investment options and make a good fortune in the process.