You should also know the cost of the investment and the views of analysts. There are instances when no amount of research can save you from a lemon but, in the long run, doing homework pays dividends. In many instances, the company being launched is not yet established, it has no revenues, and there is no proven management history. It is imperative to understand that there are risks associated with all types of investments. Depending on your unique circumstances and what you want to achieve, you need to make sure you are minimising the risk associated with the investment while maximising returns.
Performance is a measurement of risk and return.
There are appropriate investments for different investors. Some people can take on more risk for a potentially higher return, while others can't. Think before you leap Investors often rely too heavily on timing. It is not unusual to hear about investors who jump in a share during a sharp sell-off in the market, hoping the market will bounce back with a vengeance and take their investment along with it. Sometimes a question to ask yourself is whether or not a particular share or unit trust that you are holding is an investment that you would buy right now.