“Understand your time horizon when you’re making investment decisions. So if you’re buying shares and you’re a novice investor, you need to give yourself anywhere between five to 10 years as an investment horizon to buy shares,” Warren Ingram, a financial planner at Galileo Capital, told CNBC Africa on Wednesday.
Many people have made good returns when investing by choosing the right instrument to invest with, but some also lose their money because they are not well-informed before they make their decisions. Ingram emphasised that it all depends on what you’re looking for.
“If you’re looking to save money for the next year or two because you want to buy a car, put down a deposit on a house or pay the kids school fees, then shares really aren’t the place for you right now. If you’re saying this is an asset I want to build and I want to get as much capital growth as I possibly can but over an extended period of time, shares are a great place to go,” he said.
Assessing the right time frame for your investment can be attributed to proper preparation and research, and with regards to investing, information is essential.
“Empower yourself through reading – do as much research as you can. There is array of information out there on the internet, financial newspapers, financial magazines and obviously a range of financial experts who can offer you that information that you require to make that investment decision,” said Adele Hattingh, a market development analyst in the JSE’s Equity Market Division.
“The more information you have at your fingertips the better. To me information means reading books, follow the great investment guru’s out there, try and understand how they make their investment decisions and then you can start to do that,” added Ingram.