The Laws of Investing.

Right, so you are ready to consider investing some of that hard-earned money!
But with all the products and "advisors" out there, just where do you begin?

Well, the first law is to Investigate Before You Begin.
Knowledge is Power and never more so when it comes to investing. You've heard the horror stories about lost monies, negative returns and so on. But a lot of that has to do with investor ignorance.
I don't mean you need a degree to manage your money, but if you arm yourself with a little knowledge, you will know what to look out for down the line. And be able to deal with the hiccups that do happen from time to time.

Check the Details.

Don't EVER be pressured into signing something you do not understand!
There are many wolves waiting at your door!
You've worked too hard for your money just to give it away.
Ask questions and demand details IN WRITING. (I can't stress this enough, as when problems arise this will be your only basis for complaining).
Check out the investment company's record.

If you are given figures that don't make sense - say so. Ask for a simple explanation. Don't feel guilty because you don't understand. Chances are your adviser won't understand your business either!
And if you have doubt, get a second opinion from a qualified person, or leave the money in the bank until you find a product you are happy with.

It's Easy to Loose Your Money.

It's not easy to make money in our modern society - just consider how hard you work for it.
But it's very easy to loose it.
You need to be aware of a number of important factors that will affect you savings;

• Risk - we all know risk equals reward. But just how much risk should you take? This depends on things like your age, your debts, if you have life insurance and have protected your income earning potential, tax, how soon you will need the money and so on. Any good adviser (by law) has do an analysis for you, to answer these and other important criteria.

• Diversification - one method to help reduce your risk. Putting all your eggs in one basket - only in shares, only in one sector of the market, or even one country increases your risk. Different classes of shares - different investment products like cash or property - perform at different times. Hedge your bets by spreading your investments.

• Don't rely on past performances - At best, all they give is an idea of what has happened, not what will happen again! And if you want to use the figures, look to long-term results only.
  At least 5-years.

• Discipline - By far and away, compound interest is your biggest tool. It is a much-misunderstood concept. No matter what, keep your investment going for as long as possible. It reduces your risk. Time equals money. If all you do is hold onto your money, that alone can help ensure financial security.
  You loose MONEY when you cash in your investment. You only loose VALUE if you keep it going. And that you make back in the future.
  Remember, it's time in the market - not market timing that makes money.

• Tax - use what deductions you can get from SARS. This is vital when it comes to saving for retirement.

• Invest Regularly - markets rise and fall. By investing regularly in a falling market, you should get the best return. It's a theory called rand cost averaging. And it has merit!

What to remember;

• It's never too early to start investing for your future. Even small amounts, saved regularly, do make a difference.
• Learn as much as you can about investments by attending investment seminars or reading about investment strategies in newspapers, investment magazines and books.
• Where an investment product has a prospectus, read it carefully before deciding whether to invest.
• When selecting a financial planner, it is advisable to get information from more than one planner before investing your money. Invest only when you understand the products they are recommending and you are satisfied that they suit your needs.
• Ask questions to find out how much risk you are taking and make sure you are comfortable with risk. The institution providing the investment product, a professional financial adviser or accountant must be able to answer your questions.
• Ask questions if you are unsure about any implications of an investment, no matter how simple they may seem.
• Some investments may offer taxation advantages. Consider these only where they allow you to invest with safety and to feel comfortable with the amount of risk involved.
• If you are retired and have limited funds to invest, make the safety of your investments your first priority.
• Don't just chase the highest returns available - higher returns involve higher risks.
  Today's winner is seldom tomorrow's leader.
• Take your time when making investment decisions - don't be rushed into signing anything.
• Above all, remember that it's your money, so make your decisions for your own reasons, not anyone else's. The investments you choose should meet your requirements by providing the right amount of income and/or capital growth without causing you sleepless nights.

These are but a few ideas.
As you can see, there are many factors you need to consider.

The best advice I can give - is to get the best advice you can!
Read all you can about investing. Read about the economy. Investigate your options.
Be knowledgeable and you will find your confidence.

And speak to someone like myself. Don't try going it alone. It's too much of a risk.
You won't save by cutting out "the middle man!" To make money, use the resources you have and getting objective and unbiased advice is the strongest asset you can have.

Good Luck!

If you would like further advice on investing, please contact me on; Cell: 083 377 8893

Don't leave your concern here. Call me for advice - no obligation!

Especially if you are serious about Investing.

pyburn@peterpyburn.co.za