Investment management is advising people and companies how to invest their money. It’s about optimizing every dollar you have and making the most of it. Successful investment management helps you save for the children’s education, purchase a house and in your post retirement plans.

Rules of Investing:

The golden rule of Wall Street goes “the people with the gold make the rules” and it has certainly proved true at least in the last decade as gold out performed and is considered the best of investments.

• Invest as much money as you can and do it as early as possible.
• Take calculated risks.
• Do not invest money you need right away.
• Do not invest in what you don’t understand.
• One golden rule, never invest money you cannot afford to lose.

Investments can be broadly classified into three types each with its own risks and benefits. They are stocks, bonds and cash equivalents. There are many ways by which investment managers Australia help you to invest in each one of them like stocks, bonds, savings accounts, mutual funds etc.

Diversification:

Diversify your portfolio. A portfolio is a group of assets like bonds, stocks and currencies. It also consists of real estate, art and private investments. You can start investing and create a portfolio with just $100 and make contributions as little as $100. The simplest investment rule is the 5% rule. The idea suggests an investor must not allocate more than 5% of their portfolio to one investment so that a portfolio is diversified and it can get the investor reasonable returns and at the same time has minimal risks.

Risk Tolerance:

Investing has risks and the investment value may or may not decline. You must assess your risk tolerance early on even before you decide where to invest and how much to invest. It is also important to re evaluate the risk level of your portfolio later.

When it comes to money our thoughts tend to get clouded by greed, fear, nervousness etc. These emotions may tempt us to move our investments around. However the best thing to do is leave your investments alone. With time though you will need to rebalance your portfolio and it may not look like the original portfolio anymore.

Investment Time Frames:

You must invest differently depending upon how much time you have. It is basically the number of years between now and when you will need the money invested. This simplifies the whole process of investing and gives you a better picture of where to put your money. No matter what the time frame diversification is the key.

• If you need your money within two years of investing savings account can be your best bet. Though the return rate is low it is stable.
• If you need your money in two to five years, bonds are something you can consider. Bonds get you a higher income than cash. They will fluctuate but unlike stocks.
• If you need your money in five or more years, you can always opt for stocks as they get you the most return.