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Need
for Liquid Assets
Another thing to think
about is whether you will require some of your funds in
the near future. You may want to buy a house or travel
overseas. If that is the case, you should carefully
consider the shares you choose, as well as how much you
wish to invest in the share market in the first place.
Although the market has proven to return higher profits
over time than most other secure forms of investment,
the market does experience peaks and troughs. If you
enter the market at the wrong time and wish to sell
within a short period, it is conceivable that you could
lose money. If you are using the share market just to
house your funds and realise a small profit, security is
the key.
It is a different story
if you are hoping to greatly increase the value of your
funds in order to make a purchase. You’ll be forced to
invest in higher risk companies that may provide the
necessary returns but could also fail to perform in the
timeframe you desire, reducing the value of your funds.
Next:
Attitude to Risk Taking
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