Analyse and understand yourself before you try understand the markets
A keen blogger who I follow and listen to religiously, gave me advice late on Saturday night about my blog. My advice could be valuable to certain people, but completely wrong for others. My intention for this blog is to give an insight into what choices I make when it comes investing my money, and improving my wealth. I have jumped past a vital part of my blog, and embarrassingly it has taken someone else to point out how little you know about me (so thank you a certain blogger who pointed this out! – not naming any names but he has a bloody good blog to read). These are the questions I asked myself. Literally, wrote them down and answered them.
- What is my position in the investing world?
- Why Am I investing?
- What is my goal?
Simple, 3 things:
- Grow my money and wealth above what I could get in a savings account in the UK
- Have a portfolio that I do not have to check religiously day in day out and monitor actively
- Have enough diversification to ensure any volatile market movements will not impact my portfolio enough to make me change my strategy
With my portfolio I believe I will outperform the FTSE when market growth is slow, but also when markets are in decline solely because of my diversification and the type of shares I have bought
Fill in something like this (click here for the questionnaire)
It will take you 10-20 minutes, and you’ll get a score, and relate that score to the following chart.
Your portfolio should match your level of risk. My risk analysis on this questionnaire sits at balanced, which links to MY 7-8.5% target and their 7% target.
In a nutshell. Find your tolerance to risk and take it from there.
The Young Investor