The first two factors to consider when investing.

A 5 to 10-minute read, depending on your speed

In this second (of three) Insights, you’ll learn about the first two of four factors to consider when deciding what level of investment risk to take – on each of your financial life goals.

These Insights are written to help all (new, recent and experienced) investors because we must all ensure that the risks we take on our investments are right for our personal situation.

What did we cover in the first Insight?

In the first insight, ‘How much investment risk is right for you’ we:

1. Showed why it’s impossible for anyone (however smart they claim to be) to advise you on investments from a blog, book or video! Your adviser needs to be qualified AND know all about your personal circumstances and ambitions.
2. Outlined the ten foundations of personal finance to sort out – before you consider investing.
3. Explained why investments tend to produce higher returns than cash savings – over the long term.
4. Illustrated the effect of a small extra return – over the long term.
5. Warned of the extreme risks of aiming for much higher returns than mainstream diversified funds can deliver.
6. Pointed to the overwhelming choice of (140,000) investment funds and why analysing those is the wrong way to approach this.

Be sure to read that first insight before continuing here.

Can we super-simplify our fund choices?

Clearly, we must be careful when trying to simplify complicated topics – which investment most certainly is.

However, in this (and the final) insight, we want to equip you with four simple factors to consider when investing – to help you navigate these opaque (and often dangerous) waters.

We’ll start to explore those four factors in a moment.

First, you need to know something about the spectrum of risks and (potential) rewards from investing – as we show here.

For financial advisers, planners and coaches

This educational Insight is one of many we’ve created for you to use under license in your business to help more people make better financial decisions – and see the value of professional advice.

You can brand these licensable insights to your business style and add your own firm’s calls to action.

If you have any questions, please email me at hello@paulclaireaux.com