As I explained in a recent post, there are many different types of investments, and there are several important factors that determine where you should invest your funds. Naturally, you should begin with researching the various available types of investments, determine your risk tolerance, and determine your investment style and sincerely determine your financial goals. Are you interested in a quick profit-making venture (short term) or you are prepared for the long haul (long term)?
If you were going to purchase a new house or car, you would do quite a bit of research before making a final decision and a purchase, wouldn't you? You would never consider purchasing a car that you had not fully looked over and taken for a test drive. Investing works much the same way. You have to learn as much about the particular investment type as possible, and you would want to see how past investors have done as well.
Learning about the stock market and the various other investments takes a lot of time… but I assure you that it is time well spent. There are numerous books and websites on the topic, and you can even take college level courses on the topic... which is what stock brokers do. With access to the Internet, you can actually play the stock market, with virtual money, to get a feel of how it works. You can make virtual investments, and see how they do. Do a search with any search engine for ‘Stock Market Games’ or ‘Stock Market Simulations.’ This is a great way to start learning about investing in the stock market.
Other types of investments, outside of the stock market, do not have simulators. You must learn about those types of investments the hard way, by reading, or if you are lucky, through someone who’s prepared to assist you practically. As a potential investor, you should read anything and everything you can lay your hands, on about investing… and I strongly recommend that you start with investment books and websites. Otherwise, you will quickly find that you are lost.
Finally, speak with a financial planner or broker. Tell him/her your goals, and ask him/her for his/her suggestions as this is what they do for a living... it is their job! A good financial planner or broker can easily help you determine where to invest your funds, and help you set up a plan to reach all of your financial goals. Many will even teach you about investing along the way. Make sure you pay attention to what they are telling you.
In Nigeria, for example, your bankers are in a good position to give you sound professional advice. However, if you find yourself in a situation where you feel that you are not getting as much satisfaction as you would have expected from your bankers, you may need to contact a registered independent broker in any reputable private financial house to discuss your proposed investment goals.