Choosing a Financial Product for Investment

When it comes to choosing a financial product for Investment, most of the investors rely on random tips they received from friends or relatives rather than analysis. Needless to say that this will result in financial losses later on. It is very important to adopt due diligence while choosing a financial product and the checklist given below can be helpful.

  1. Before choosing a financial product, an investor needs to decide the goals for which he is making an investment. These goals can be divided into short-term, medium term and long-term goals.
  2. Investors need to understand the risk of the financial product and need to match it with his own risk tolerance level.
  3. Investors should not just focus on the return but they should also try to understand the risk of the financial product in which he is investing.
  4. Investors should take into consideration the Liquidity of the financial instruments.

Author: Hardik Gandhi, Assistant Professor –  Unitedworld School of Business (UWSB)

Disclaimer: The opinions / views expressed in this article are solely of the author in his / her individual capacity. They do not purport to reflect the opinions and/or views of the College and/or University or its members.

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