How to create an investment plan

investment plan

Don’t start a new day before you’ve already finished it on paper. When undertaking a project it is important to be aware of what is being done. Our instinct leads us to consider the challenges facing us independently, one at a time, one after the other. However, if you have decided to invest, and the same is true for any other complex activity that involves a commitment over time, it is important that you do so following a specific investment plan.

Acting in relation to a well-defined program is the first necessary step to gain a strategic perspective, sheltering from unexpected surprises and knowing how to correct the route along the way when necessary. Planning is less complicated than you might think, rather it will help you make your investment journey easier.

There is no need to study, the real secret is to know oneself and one’s goals. Here is a way to achieve this in three steps.

1. Clear your goals

One of the most common mistakes among investors is to enter the market without specific objectives. Many invest their savings with the generic purpose of “earning something”. This rather vague idea is often accompanied by a trial-and-error approach: investing to explore the terrain with a short-term perspective.

This method will hardly give you satisfactions, also because if it is not clear to you what your goal is you will not even have a meter of objective evaluation.

On the contrary, by identifying well-defined goals, you will immediately see why you are investing and can calibrate your expectations around it.

This is why you should not be afraid of having even great ambitions. Probably a lot more than you think it can be realistic to reach, in financial terms, is actually within your reach. The important thing is to maintain an orderly investment conduct.

With long-term prospects, great results can be achieved by taking risks, even if limited.

2. Understand your risk appetite

The second piece of information you need to understand to prepare the perfect investment plan for you is your willingness to take risks. The latter will be determined by two main factors: how significant the invested capital is in relation to your assets and some unique characteristics of the personality.

It is important that you invest your investor profile before investing. If you are curious, try our test, it will help you to better understand your attitude towards the markets.

3. How much and when to invest

Once the objectives and risk profiles have been determined, it is time to figure out how to enter the market and with what timing. Obviously this decision is determined in part by the purpose of the investment and partly by your availability.

You might find it convenient, even to gain confidence with the world of investment, to opt for a savings plan. This solution would also help you set monthly expenses based on your savings goals, reducing waste and triggering a virtuous circle that will benefit your overall financial situation.

Now that you know yourself: Go into action

At this point you will be able to easily understand fundamental information: the time horizon in which to invest and evaluate your results. If you think about it, the latter is nothing but the direct consequence of your goals, your availability and your psychological profile.

In light of this new awareness you will be ready prepare investment plan with clear ideas. These are the tips I can give you …

  • Choose diversified financial instruments to avoid exposing yourself to excessive risks.
  • Contact an experienced consultant. Today, to have a professional who helps you manage your assets, you don’t need to be a multimillionaire. Thanks to the technology that has innovated the financial management industry, commissions (unfortunately it cannot be said for all managers) can be very limited.
  • Choose an independent financial advisor. Avoid the conflicts of interest that are typical of the sector and turn to those who, as the only incentive, your performance.
  • Don’t let yourself be intimidated by the daily market trend. Always remember your goals and your time perspective. Instead, choose to make periodic reviews to correct the shot, focusing on the big economic trends rather than on the whims of the stock market.

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