Proven Strategies for Better Personal Investment Decisions

Those who aren’t familiar with the ins and outs of personal investments may think of it as a get-rich-quick scheme. Nothing could be further from the truth. In fact, success with personal investment comes from awareness, knowledge, rationality, and patience. Are you a hothead who works purely on instinct? Or a ponderous, timid, and reluctant investor? As with most things in life, the key is balance. There are some common - and not-so-common - proven strategies you can adopt to help you make better decisions when handling your personal investments. Read on to find out more.

What is a personal investment?

Personal investment is when an individual, rather than a company, invests and manages their own financial portfolio, such as stocks, bonds, property, or currency. It requires the individual to form their own strategy and framework, based on their own aims, and to an extent, their personal characteristics. Many choose to invest as a way to build wealth, potentially quicker and more lucratively than interest in a savings account. It’s also a way for individuals to take more direct control of their finances and financial security, and put their money into causes or products that they believe in.


Make a plan

Before you start pouring money into anything, you’ll need to make a sound plan to keep your investments on track. A financial plan will allow you to assess your current situation - how much money you have left to invest after your monthly outgoings are covered, your credit situation, and your risk tolerance. One of the main benefits of a plan is that it discourages investors from making emotional or spur-of-the-moment decisions that will cost them money and derail their plans for increased wealth. The plan should be honest and realistic, and most importantly, stuck to.


Seek advice

To the uninitiated, personal investing can seem confusing and daunting. And in a way it is! Beginners are more likely to make bad decisions, invest in the wrong thing, or invest too much or too little. Happily, there are financial and investment planning specialists that can help along the way. Whether you’re a seasoned investor or wet behind the ears, it helps to have someone in your corner who can offer sound, balanced advice to help you better manage your financial portfolio.


Invest early and often

When you’ve got money to invest, invest it. Money that sits in your bank account doesn’t work for you in the same way invested funds do. It might seem daunting to suddenly throw your money into an investment (again, consult with your chosen professional), but the longer it is invested the more chance it has to grow. And don’t try to time the market - stocks and other investments rise and fall in value often, and pulling funds out of the market (and putting them back in) are difficult events to time.


Types of personal investment

There are several ways that your money can be invested, and each investor will choose the type that suits their goals and overall plan. An investment advisor can also be of use here, as this can be confusing at the outset. Here are some of the most common types of investment.



Also known as shares or equities, buying stock is probably the most common way to invest money. When you buy stocks you’re buying an ownership stake in a publicly traded company. Hopefully, this stock will rise in value, and you’ll be able to sell it for a profit. Of course, there is inherent risk attached to buying stocks - should the company suddenly tailspin or the market crash, you’ll lose money on your investment.



A safer but usually lower profit way to invest, when you buy a bond you are lending an entity money. This is almost always a company (corporate bonds) or a government organisation (municipal bonds). While the money is lent you accumulate interest on your money, and when the bond matures you can take back the principal and your interest. Again, there are risks, such as the company defaulting, or a market crash.


Mutual funds

This refers to a pool made up of several investors’ money as an investment vehicle that is invested in a number of companies. Although the investment is subject to the same risks as stocks or bonds, it is by nature diversified, lessening the risk.



When you invest in a commodity you are investing in a physical product. These are made up of metals (precious ones such as gold or silver, or industrial, such as copper or aluminum), agricultural products (wheat, corn, soybeans), livestock, and energy. Investing in a commodity requires an in-depth knowledge of the product, and markets can shift suddenly and dramatically due to unpredictable world events, such as weather (drought, monsoon, heatwaves, or unexpectedly cold weather), war, or social unrest.

No matter how you plan to invest, having a plan and strategy is essential. And, with good advice and rational thinking, making the right decisions can pay dividends.

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