Whether you’re opening an account to invest for the long-term or save for the short-term, it’s important to make sure the opportunity is right for you. Here are the question you should ask before investing in any kind of venture.
1. What is the risk?
 All investments have risk. It’s important you understand your tolerance for risk before you invest. If you have a low tolerance for risk, you may want to choose a conservative strategy that relies mostly on fixed investments, such as bonds and bond funds. If you have a higher risk tolerance, you may want to consider more aggressive investments, such as stocks and stock funds. Keep in mind that even bonds and other conservative investments can lose value. Before you invest, know your risk profile.
2. What is your timeline?
When it comes to investing, we all have a timeline. Your timeline is made up of the years that represent your financial life. Most of your timeline will be spent saving and growing money. The last part of your timeline will be spent withdrawing and living off that money. Regardless of where you are on your timeline, it’s important to know when you will move from accumulation to withdrawal and if your goals are on track.
3. What are your goals?
If you don’t understand how an investment works, you probably should not invest in it. Without understanding an investment, you can’t properly assess whether it matches your overall financial goals, risk tolerance and timeline. Investing does not have to be complicated. Take the time to find the investment that best meets your needs.
4. What are the fees incurred in the process?
All fees and expenses should be transparent. If they are not, be wary of what’s being offered and who is offering it. Returns are never guaranteed, but fees, expenses and commissions are. Investments should come with a prospectus or some other document that breaks down the costs of the products being offered. If you’re working with a financial adviser, it better you know how he/she does things.
Before investing,just have these questions in mind.