Understanding the basic investment concepts and your investment goals can make investing more meaningful and help you make informed decisions.
The first step is to decide if you are investing for growth or to derive an income. You can then define your investment goal, which is what your investment needs to do and by when. For example, you may want your money to grow by inflation plus 6% over 10 years.
When you know the return needed to reach your goal, check the asset class and risk required to earn that return. It is essential to know the level of risk you are comfortable with and your risk tolerance. Your investment strategy should align with your risk profile and goal timelines.