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What to consider before making investment decisions
12 Mar 2018

We often find ourselves at crossroads when faced with the decision of whether to invest or not. When should I start investing? Is it a good time? How much should I invest?  These questions are all too common facing each and every one of us, irrespective of the age or stage in life. Investing might seem a daunting step, and even intimidating especially when faced with experts speaking in unfamiliar jargon. The following are a few suggestions which could help you understand the process of investing and the basic matters you should consider before making an investment decision.

Devise a financial plan

You need to start by assessing your current financial situation. Then, you need to identify your financial goals and objectives. Here it is advisable to factor in the level of risk you are prepared and able to take which can be more easily determined with the help of a Financial Advisor. Whilst there are no guarantees that your investments will go up, a financial plan will help you visualise your present financial situation in the context of the level of risk you are prepared to take to achieve your financial goals.

Risk and reward

The higher the risk the better the reward that you are to expected. But what is Investment Risk? Although every investment instrument carries a degree of risk, some financial investments may be riskier than others. The general understanding is that if you are prepared to risk more, then, the expected return on the investment should be commensurately higher.

It is worth noting that the potential of the invested money going down is higher with the riskier financial strategies and there is no assurance that your investment will earn you money. A Financial Advisor can provide expert guidance on how your invested funds should be divided across different asset classes and categories through determining the level of risk you are able and willing to take, taking into consideration your present situation and investment objectives together with your financial goals and pre-determined investment horizon.


One of the wisest investment decisions to mitigate risk is diversification. We all heard the saying ‘Don’t put all your eggs in one basket’. Investing all your wealth in one type of investment would be imprudent. If the investment chosen does not perform as expected, then the returns yielded by your portfolio would be in line with the fortunes and misfortunes of that particular investment.

Savings versus investments

A savings account will not earn you much interest and is highly unlikely to meet your long-term investment objectives, but the capital is guaranteed by the Bank that has borrowed your money. It would however be imprudent to invest all your savings money. Other than your daily needs, it makes financial sense to invest your savings in different financial products which may be riskier but which should yield a better long-term return.

Review your Portfolio with your Financial Advisor regularly

You may request a review of your portfolio every time you feel it is necessary. The benefit is twofold – it will help you understand how your investments are faring, whilst concurrently identify any possibility of rebalancing your portfolio. You may also decide that your circumstances, goals and objectives have changed and a recalibration may be necessary. Although every individual is unique and faces particular circumstances, many financial advisors recommend reviews at intervals of six to twelve months.

Ready when you are

Your next step is to approach a trusted Financial Advisor. Financial Advisors at BOV Wealth Management and Investment Centres can guide you towards maximising your returns on your investments. They are equipped with the necessary knowledge and tools to understand the investment world and the markets, whilst personalising the service to suite your unique requirements as dictated by your personal situation.

Article published on It-Torċa - 11th March 2018










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