If you’re considering investing your money, there are several questions you need to ask yourself. Specifically, what is it you want from your investments, how long can you give the investment before you need your money back and how much risk are you willing to take? For example, if your investment should help you buy a house in a few years, it’s unlikely the investment will have matured sufficiently in that time, but a more long-term goal, such as saving for a pension, could be ideal as short-term fluctuation won’t be of importance.

Once you’ve identified your investment goals and a realistic timeline, you will need to ensure you’re making the best choices with your money. Here is an introduction to the key factors you will need to consider for making your first investments.

Draw up your investment plan

An investment plan will enable you to find an investment which is right for your situation. Many beginners start with low-risk products such as savings accounts before moving on to higher risk investments enjoy buying shares in a business or the stock market. Until you fully understand the risks involved and are comfortable that you have enough capital to cope, should it fail, stick to low or medium risk.

If you are considering investing in a business or making a full-time career from investments, you might study one of the MBA programs in Michigan which focuses on key business skills including financial management and investment.

Spread your investments out, i.e. diversify

It’s the financial equivalent of not putting all your eggs in one basket, by diversifying your investments you can spread your money across several sectors and types which will not fluctuate in the same direction at the same time. Investment is largely about risk and often the biggest risks offer the biggest returns, but in your early days it’s best to diversify.

Consider how involved you want to be day-to-day

You can invest in different types of products and some will require more of your time than others, so choose carefully according to how hands-on you want to be on a day-to-day basis. For example, buying individual shares in a company can be more involved than investment funds or trusts which put the money of lots of different investors together.

Remember to consider charges

There will usually be charges when buying shares through a stockbroker or through a fund manager, in the case of investment funds. If you seek financial advice about your investments, you will also need to pay the adviser. Investment charges will vary depending on which firm you choose to use, so it’s best to compare a few different options and ask questions about the quality of service you will receive.

Carry out regular reviews

It’s important to monitor your investments with regular reviews so you can see how they are doing and if it needs any adjustments. However, markets fluctuate almost constantly and it’s very possible to watch investments too closely, to panic when things take a turn for the worse and sell too early. Therefore, it’s often best to leave your investment for a longer period of time before reviewing its progress. Annual reviews are usually sufficient and you should receive statements to keep you updated.