September 6, 2014 Alice White

Individuals can consider several ways to make their investment choices and invest in stocks.

Being an independent investor: You can do your own research by reading the newspaper, annual reports, corporate documents, books and financial Web and following other media sites. You then choose the funds or shares you want to buy. You can then use the services of a discount brokerage house or an online broker to place orders.

Invest with your bank or brokerage firm: Another option is to invest in the financial markets with the help of a broker who can advise you. Banks and brokerage firms can not only take your trading orders, but also advise you in choosing your investments.

Use the services of a financial investment advisor (CIF): you can use the services of financial investment advisers (CIF). Their role is to help you personally, for a fee, to decide where and how to invest. Depending on your needs, the CIF can advise you in choosing your investments. More generally, they can help you plan your family budget, make tax savings or achieve your full heritage assessment. These consultants can charge you a fee or reward by taking commissions on financial investments through them; most often, they offer a combination of both. In all cases, they are required to itemize you in a written document and countersigned the amounts and the terms of their salary before making any investment decision.

Your financial investment plan

Whether you seek the help of a professional or prefer to invest alone, you will need to determine your goals, preliminary step to establish an investment plan. How individuals choose their investments actually depends on their income, their objectives, their age, personality and other factors.

To develop an investment plan, you need to assess your financial situation and goals: how much money do you need for daily expenses such as food, shelter, clothing, health, transport and leisure? How much have you made ​​to protect yourself from unexpected events such as accidents, illness and job loss? How much do you need to save for important and predictable expenses, such as housing, school fees of your children, if any, and for your retirement?

In terms of investment the choice of the lesser risk translates into lower earnings; but on the other hand, the return on investment is safer.

A bank savings account offers a low yield but with some security. Certificates of deposit and accounts money market rates are also relatively safe, but also offer a low yield of the order of a few percentage points per year.

This type of investment is called investment in the short to medium term, that is to say when you need money available at any time from this week or in a year or two.

At the other end of the scale, there are high-risk investments, such as shares of small little known or obligations low rating and high yield companies. These investments usually have a more attractive than safer investments, such as stocks of good father and grade corporate bonds or income yield. However, most companies in question are at high risk, the greater the probability of loss of investment.

For investment in the longer term, over several years or more, the stock market has historically offered the best rate of return on investment.