QUESTION: I want to invest, but I don’t know what company to invest in and how to. I don’t know where to start, but I know I would like to make a step towards some kind of investment that can turn over money short term.

– Shanakay

 

FINANCIAL ADVISER: To invest is to use money to make a return – in the form of income (interest, rent, dividend), capital gain, or both.

Investment vehicles include securities – tradeable financial instruments such as bonds, debentures, preference shares, and ordinary shares; physical assets like real estate; and commodities such as gold.

It is important to understand several things about investing before making a commitment to invest. The price of investment instruments is determined by demand and supply in the market, so investors may make gains or losses. Risk, the possibility that the return the investor expects may not be realised, is an essential part of investing.

Potential investors should understand that investing is long term. Notwithstanding the short-term price fluctuations, over the long-term, the price of investment instruments tend to increase.

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