Whether Or Not to Invest in the Share Market

As you see the Sensex racing towards higher marks, you suddenly realise that you also can be a part of the action and earn good money by investing in shares.

But wait! Shares trading can bring you big returns and can also put you into deep financial troubles if not done properly.

Deciding whether you should invest in shares or not, and how much; depends upon your ability to survive even if you suffer losses.

The basic thumb-rule applies here i.e., ‘you can afford to bet as big as you can afford to lose’. But if you need greater clarity, you need to understand whether you are a risk-averse, risk-neutral or risk-friendly person. Here are a few tips to find out:

Australian Investment Education’s CEO Andrew Baxter is currently offering a free Investor Personality test on their website, to see what type of investment is best suited to you.

Age: The younger you are, and the less commitment you have, your risk tolerance is greater. You can always start back from scratch.

Personal status: A married person should take fewer risks, if you have young children and old parents, then also you must take fewer risks.

Career status: If you are at the peak your career, and retirement is more than ten years away, you can afford to take risks.

Tenure: A lot of things depend on how long you want to invest. Industry expert and speaker of motivational seminar Andrew Baxter suggests that your investment period will decide the type and amount of investment you can do.

Saving ratio: Your monthly saving ability decides how much risk you can take. The more you save the more you can invest.

Financial back-up: Having financial back-up assists in enhancing your risk-taking capacities. One should also consider his current standard of living.

Expectations: If you aim to have higher gains, you must be ready to lose more too. Just ask yourself, if you gain handsomely next month, will you invest more?

Other than analysing the preceding factors you can gain more knowledge about succeeding in the share trading market by getting trained at a renowned trading and investing advisory and coaching organisation such as Australian Investment Education.