Investing your hard-earned money is not easy, but it is often the best way to help you achieve your financial goals and life plans. But how do you know if the financial advice you receive is accurate? Have you considered the long term effects of inflation on your savings? Do you know the reason why diversification is important when you invest?
In the following pages we will guide you through the basics of investment so that you too can become a smarter investor and have a better understanding of your financial advisor's recommendations.
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It is important to understand that investing in equities involves risk, particularly over the short-term. But if you are prepared to be patient and focus on the long-term, equities offer the potential for relatively higher returns. Investors with a low tolerance for risk and a short investment horizon should generally avoid equities.
The stock market may appear an uncertain place to put your money. Markets move continually as they react to economic news and to supply and demand for shares. Daily movements in the stock market can be sudden and sharp but investors should be prepared for such volatility.