Ways on how to determine if an investment is worthwhile or not. Guides on how to spot the best investments options today. Here are some points to consider in knowing if an investment is worthwhile. Every investors has different point of views why they choose a certain instrument. A good investment for me may not be a good investment for you. Especially, if we both know the importance of asset allocation.
Investing is rewarding. You will only get the rewards if you are aggressive in knowing which investment is the best. Many of us just decide to invest. But, few invest their money with a proper investment plan.
How to Determine whether an Investment is Worth It?
For me there are only two things to consider to determine if an investment is worthwhile. The ROI (return on investment) and the risks involved. I am investing money in mutual funds, unit trust accounts and stock market. I prefer to invest in the stock market because the ROI I get to my investments. I am happy as long as I gained 12% or more per year.
Return on Investment
The return on investment is one of the criteria you should analyze in a certain investment. Make sure that you invest on a vehicle that helps you to achieve your financial goal. If you want to double your investment in a specific period, make sure that your investment is earning the required interest.
For me an investment is worthwhile as long as it can help me achieve my investment goal.
Risk Involved in Investment
Would you take high risks and get low rewards? In the world of investing, high risks, means high rewards. But a wise investor can gain high rewards while taking low risk or any no risks at all.
An investment is worthwhile if you think the risk you take is proportion to the rewards you can possibly get.
What about you? Aside from return on investments and the risks involved, what do you think are the other things to consider in determining if an investment is worthwhile. Let me know your thoughts about this. Leave a comment below and share this with your friends.