the season to be jolly the old adage goes, and that is true.
For a great number of us, it is the season of bonuses, gifts
and extra cash. But long after the holiday is over, we need
to ensure that our money is earning for us and that our
funds are sustainable.
What should we do with those extra Christmas funds? Well,
in order to make that decision, lets go back to the
basics of investing. As you already know, there are numerous
financial products and services, and while they all make
promises of making your money grow, different investors
have differing needs and your choice of product should be
based on your own personal financial plan.
Firstly, you will need to identify your investment goals.
Is it to take an European vacation next year, or to begin
a university degree programme, or simply to have a comfortable
retirement? The goal that you set will point you in the
direction of the best financial instrument to fit your needs.
Once your goals are set, you will need to decide on the
time frame in which you would like to achieve them. Your
time frame is crucial since it helps inform your decision
on which financial instrument will give the best possible
Investors attitudes range from very cautious to highly
speculative and varying degrees in between. There are some
financial instruments best suited to those who are afraid
of risk, while other instruments are far more suited to
the adventurous investors among us. Once you decide on the
level of risk you are willing to take, this will assist
you in determining the options you should choose.
With your goal in front of you, your time frame for investment
and your risk tolerance in mind, you can then look at the
product types best suited to your needs. For example, if
your goal is short-term, ie under one year, and you are
a very cautious investor; repurchase agreements, fixed deposits
and money market funds are best.
These instruments represent relatively low risk with moderate
interest rates and growth over this short period. If your
time frame can be extended from one to three years, then
the possible returns on
these types of investments are much better.
Where your time frame is even longer and your risk tolerance
is higher, equity-based funds, stocks, and some bonds provide
a great option for higher rewards. The principle here is
quite simple, depending on your goal, time frame and risk
tolerance, there is an investment product to suit almost
This season as you make merry, consider your investment
goals and let us help you to choose the right investment,
of course the time to get started is now!
As we close this column for 2006, I invite you the readers
to send in your questions to [email protected] Next year,
we will start by answering questions from investors and
information contained in this article has been obtained
from sources that DB&G believes to be accurate and reliable.
All opinions and estimates constitute the authors
judgment as of the date of the article. No warranty as to
the accuracy, timeliness or completeness of this article
and as to the opinions based thereon is given or made by
DB&G and/or its employees or directors and/or any associated
person may have an interest in, or interest in the acquisition
or disposal of, the securities or class of securities mentioned
Call 1-888- CALL DBG if in doubt about the content of this
article. Decisions based on information contained in this
article are your sole responsibility.