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When You Invest, Count the Profits But Anticipate Losses

When You Invest, Count the Profits But Anticipate Losses

When we invest, one of the factor we are looking for is the return on our investment. Usually the higher the better. But we all know that as the return goes high, so ask the risk that investment have. Profitability of the investment is still one of the criteria we are considering.

Return varies from one investment to the other. While it is a good thing to take note of the return, we have to take note that all investment have risks. It will be foolish to say that your investment has zero risk at all. Even if it’s less risk, it’s still a risk which we need to take note. Who would have thought a big company like NOKIA will be obsolete today. If you invest in an equity fund and all the companies invested by that fund collapse, you’ll find your investment at the bottom. I know it will be almost impossible to happen, at least it’s a risk scenario that could happen and you should anticipate.

When you invest, it’s a good thing to count your profits. Being optimistic about it is a good thing, it helps us motivate and excites us. However, counting chicks while the eggs are still unhatched have it’s consequences.

Anticipate that all investment comes with a risk. As such, losing money is a scenario you should prepare yourself. That’s why it’s important to follow the best practice before you invest your hard earned money:

1. Have a good cashflow
2. Pay off all your high interest debt
3. Have emergency fund, at least 6 months of your monthly expenses
4. Get complete insurance coverage
5. Invest your extra money

Happy investing!

About Richard Macalintal

Hi my name is Richard. I am a Registered Financial Services Consultant in Singapore. If you have any queries or you need help on your insurance policies and investment linked products, feel free to message me :-) We can have a cup of coffee while I do financial review and give advice with regards to your finances :-) Contact me thru email rlmacalintal(at)yahoo.com or SMS me +65 82235186. Disclosure: I am a Financial Consultant of AIA. The statements or opinions expressed on this site are my own and do not necessarily represent those of AIA.

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