| With so many options available, novices might | | | | upon these two factors. You must remember |
| think that investment is just a matter of choice. | | | | that every instrument has its own risk value. |
| But in reality, making the 'right' investment choice | | | | Stocks are known to fluctuate frequently in value, |
| is the core of making intelligent investment. So | | | | carry a high level of market risk over the short |
| what should be the investing strategies for | | | | term, earn high returns and normally outpace |
| novices? | | | | inflation. Bonds on the other hand have less |
| Asset allocation is one of the first investment | | | | severe short-term price fluctuations and |
| strategies that should be learnt. It is the way in | | | | therefore offer much lower market risk. Money |
| which you divide your investment portfolio among | | | | market instruments are the most stable of all |
| three primary asset classes: stocks, bonds and | | | | asset classes in terms of returns. They carry |
| money markets. This can boost your potential | | | | relatively low market risk but lack the potential to |
| returns and ensure long-term investment success. | | | | outpace inflation. |
| It can also help you channel your investments. For | | | | Diversification should be another part of your |
| example if your goal is to pursue growth and you | | | | investment strategy. When you diversify your |
| are willing to take market risk, you would like to | | | | investments you reduce the risk level. It also |
| invest more in stocks. Asset allocation also helps | | | | helps you balance a fall in the value of one |
| you lower your investment risks, without diluting | | | | instrument with gain in the value of another. |
| your investment goals. | | | | Finally, you must plan for the long-term. The |
| As a first-time investor, you must also include the | | | | investors who benefit most are those who limit |
| time frame and tolerance for risk in your strategy | | | | their short-term investments, and focus on |
| because your choice of investments depends | | | | long-term gains. |