Having some amount of savings gives you a good level of security given the turbulence in the financial markets and in many of the world’s economies. However, the uncertainty will inevitably affect you, your choices and perhaps your money in one way or another. That is why you have to be extremely careful and ensure that you will make smart investment decisions. This should minimize risks and provide for good returns.

Adopt an investment plan especially tailored for your needs. You know your spending habits best and what major expenditure you will have in the near future. You have a precise idea about your income and the value of the assets that you have. This should be enough to help you come up with a plan for your investments.

Diversify the assets that you are holding. This is particularly applicable to financial products. This is the most effective method for minimizing risk so you should definitely use it. However, given the shaky markets at present, you have to be extremely careful about the choice of stocks and bonds. In general, government bonds were considered to have the lowest risk for investors. However, with the recent events in Europe – more countries becoming unable to repay their debts – this is not necessarily the case. Experts recommend that you put more time and effort in research and in managing your portfolio. Holding stocks and bonds in the ling term is no longer considered a low-risk strategy with good returns.

Be realistic in your expectations and do not increase risk too much. The reality is that you can expect between 5% and 10% return on your investment when keeping risk low. For many people this seems insufficient. However, increasing the risk is certainly not recommended given the extremely shaky markets that are affected by literally every rumor.

Do not mix investment and personal affairs. Lending money to friends and investing in a relative’s business may seem good ideas when you have relative financial stability. However, these are the riskiest of investment decisions even in a stable and well-performing economy, according to experts. Avoid them if you do not want to lose money.

Use the services of a financial advisor, but always take the major decisions yourself. An experienced professional should help you come up with an investment plan suitable for your needs and assist you in starting and managing a portfolio. However, many advisors seem to offer things that are too good to be true. That is why you should always evaluate each proposal carefully before making a decision.

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