How to Invest Your Savings Wisely

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How to Invest Your Savings Wisely

Posted On : Oct-05-2009 | seen (469) times | Article Word Count : 582 |

You have worked hard and slowly acquired savings. Retirement is not too far away and you can see that your pension fund and savings will not keep you in the style to which you have become accustomed.

You have worked hard and slowly acquired savings. Retirement is not too far away and you can see that your pension fund and savings will not keep you in the style to which you have become accustomed. So, what do you do? Sure there are plenty of high-risk ventures around, but you want to be sure of your nest-egg.

Ways to Invest Your Savings

There are myriad ways to invest your hard-earned savings cautiously. In fact, there are so many ways that it all becomes a little confusing. One way through the confusion, which financial advisers recommend, is to know what you want to achieve, know how much risk you are prepared to take and go from there. But, which way? Two common answers to this question are investment funds (for the short-to medium-term) and investment-led life insurance for the long term. Whichever way you find suitable, the key point is to invest the right way.

Investment Funds - Investing the Right Way

So how do you do it? Begin with a self-analysis and try to fine-tune your investment objective as well as your tolerance towards risk. Then ask yourself what time frame you want your investment return in for this might well determine the type and the focus of the investment fund you will eventually choose.

The next essential step is to decide the amount (as a percentage of your total investable capital) you would like to put into investment funds after reserving enough cash back-up for yourself. As an investment strategy, find out or look for a dispersion of risks through a basket of funds focusing on different asset classes, regions or currencies.

Investment Returns - Experts Advice

Investing experts would advise that if you are a more cautious investor with $10,000USD and a three to four year time frame, emerging market funds with high volatility are out. Instead look at fixed-income funds that are exposed to fixed interest, securities or money markets and most importantly denominated in US dollars.

However, if you have around $50,000USD to invest for a good ten years, then you might want to try and build an investment pyramid with global equity funds at the bottom, European funds in the middle, and emerging market funds at the top. This spreads your risk while optimizing returns. Also keep in mind that risk and returns have a direct correlation.

Sturdy-nerved types can make up to twenty five per cent per year, whereas fixed interest funds will generally not return you as much, but the risk is lower. Take at least a medium term such as three to four years view on your funds investments. Once you have decided on a particular fund make sure to give it time to run and don't switch too frequently until you're seeing some results. Shortlist the funds based on structure of portfolio, management style and exposure of the funds assets.

Make sure your fund has rewarded its investors consistently over the past three years, five years or whatever. But don't go overboard on dazzling past returns from funds, such as Asian regional funds for it is quite impossible to generate another hundred per cent gain from these markets over the next three years.

Now it is time to hunt for one in the category that is likely to maximize your investment returns, both in terms of capital appreciation and dividend yield. GP

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<h1>How to Invest Your Savings Wisely</h1> Author: <a href='http://www.articleseen.com/profile_Yossarian Smythe.aspx'>Yossarian Smythe</a> You have worked hard and slowly acquired savings. Retirement is not too far away and you can see that your pension fund and savings will not keep you in the style to which you have become accustomed. So, what do you do? Sure there are plenty of high-risk ventures around, but you want to be sure of your nest-egg.

Ways to Invest Your Savings

There are myriad ways to invest your hard-earned savings cautiously. In fact, there are so many ways that it all becomes a little confusing. One way through the confusion, which financial advisers recommend, is to know what you want to achieve, know how much risk you are prepared to take and go from there. But, which way? Two common answers to this question are investment funds (for the short-to medium-term) and investment-led life insurance for the long term. Whichever way you find suitable, the key point is to invest the right way.

Investment Funds - Investing the Right Way

So how do you do it? Begin with a self-analysis and try to fine-tune your investment objective as well as your tolerance towards risk. Then ask yourself what time frame you want your investment return in for this might well determine the type and the focus of the investment fund you will eventually choose.

The next essential step is to decide the amount (as a percentage of your total investable capital) you would like to put into investment funds after reserving enough cash back-up for yourself. As an investment strategy, find out or look for a dispersion of risks through a basket of funds focusing on different asset classes, regions or currencies.

Investment Returns - Experts Advice

Investing experts would advise that if you are a more cautious investor with $10,000USD and a three to four year time frame, emerging market funds with high volatility are out. Instead look at fixed-income funds that are exposed to fixed interest, securities or money markets and most importantly denominated in US dollars.

However, if you have around $50,000USD to invest for a good ten years, then you might want to try and build an investment pyramid with global equity funds at the bottom, European funds in the middle, and emerging market funds at the top.  This spreads your risk while optimizing returns. Also keep in mind that risk and returns have a direct correlation.

Sturdy-nerved types can make up to twenty five per cent per year, whereas fixed interest funds will generally not return you as much, but the risk is lower. Take at least a medium term such as three to four years view on your funds investments. Once you have decided on a particular fund make sure to give it time to run and don't switch too frequently until you're seeing some results. Shortlist the funds based on structure of portfolio, management style and exposure of the funds assets.

Make sure your fund has rewarded its investors consistently over the past three years, five years or whatever. But don't go overboard on dazzling past returns from funds, such as Asian regional funds for it is quite impossible to generate another hundred per cent gain from these markets over the next three years.

Now it is time to hunt for one in the category that is likely to maximize your investment returns, both in terms of capital appreciation and dividend yield. GPAbout the Author: Wilson Field specialise is business recovery and personal debt solutions such as <a rel="nofollow" href="http://www.wilsonfield.co.uk/individual/iva.htm">IVAs</a>, CVAs and Liquidation. If you have taken out payment protection insurance on any of your loans then Real Claims specialise in <a rel="nofollow" href="http://www.realclaims.co.uk">PPI Claims</a> which could win your thousands back from the loan companies. Article Source: <a href='http://www.articleseen.com/Article_How-to-Invest-Your-Savings-Wisely_3796.aspx'> http://www.articleseen.com/Article_How to Invest Your Savings Wisely_3796.aspx</a>

Article Source : http://www.articleseen.com/Article_How to Invest Your Savings Wisely_3796.aspx

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Wilson Field specialise is business recovery and personal debt solutions such as IVAs, CVAs and Liquidation. If you have taken out payment protection insurance on any of your loans then Real Claims specialise in PPI Claims which could win your thousands back from the loan companies.

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Category : Finance : Finance

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