The importance of an investment plan
As with many things, if you don’t have a clear plan of what you’re aiming for and how you’re going to achieve it, you could get lost along the way.
This is why it’s so important to take the time to set out a plan before you begin investing in shares. By setting clear goals and targets, you have something to work towards.
There are some main aspects your investment plan
needs to include. Let’s take a quick look at each of these…
Investment plan point #1: Financial situation
Four points to include in your investment plan
You need to work out if you have money to invest on the stock market. You shouldn’t put any money into shares that you need over the short- to medium-term.
You should approach your stock market investing with a long-term view.
Investment plan point #2: Your long-term investment goals
Why are you investing in shares? You need to write down your long-term investment goals. Ensure you make these realistic.
Investment plan point #3: Your short-term investment goals
Break down you long-term investment goals into short-term goals. This means you’ll easily be able to check how you’re getting on and if you’re on track to achieve your long-term goals.
Short-term goals will also help to keep you motivated.
Investment plan point #4: Types of financial instruments
Decide what types of financial instruments you’re going to use to achieve your goals. Are you only going to invest in shares? Or are you going to invest in bonds or perhaps exchange traded funds (ETFs)?
Once you have a detailed investment plan, you’ll find it much easier to begin investing. You can tweak your plan over the years if necessary. And don’t forget to check you’re achieving your short-term goals.
So there you have it. Why you need an investment plan if you’re eager to start investing in shares.
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