When you compare an investment market you should look first at the returns. Are they substantial? Are they relatively easy to achieve? How much will be left after taxes and investment fund charges are deducted? Comparing investment returns is definitely not easy because there are many things you need to consider. Here’s some help.
· Calculate returns individually for every investment you make. This takes more time than broadly estimating total returns on your investments, but it will provide a clearer picture of where you stand. Making these calculations is especially important when you hold a varied portfolio, with investments in many asset classes.
· Consider your previous returns on similar investments in the past. By doing this you will identify those investments you are particularly good at, as well as the ones that are not your strong point. It’s crucial to understand what you are good at, and to keep doing it. No investor can excel at all types of investment.
· Keep in mind the beta coefficient of the investment, i.e. the measure of how risky a fund is. High beta coefficients denote funds that are known to be volatile and entail many risks. If you want a safe, long-term investment, you will probably want to avoid investments with high coefficients.
· Use a professional stock comparison service. Many investors are not keen on letting a third party interfere with their investment plans, as this usually means spending extra money on extra services. But often services like those provided by Compare The Financial Markets help investors discover lucrative investments they would have otherwise never discovered.
- How much do you have to invest?
- How long do you want to invest for?
- When do you require a return on investment?
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