Investment Planning is very important. You cannot invest in any investment because other people are doing so because you could end up losing your money. Investment planning on the other hand will help you know the investments that are worthwhile, evaluate the Risk/Return of each investment and invest wisely.
Earning from Investment Planning may require you to analyze data before you can make a decision. In the past analyzing data was difficult and most people left it to the brokers and financial advisors. Today there is a lot of information on the internet software to help anyone find the information outright. However many people may not know how to interpret the data or they may not have the time so they will rely on professionals to analyze the data and advise them. Whatever the case may be investment planning even at the basics is very vital.
You will need to plan on the type of investment and how much to invest in each category and for how long. Most people still invest in bank accounts and fixed deposits. They earn interest from these savings and the money is available for withdrawal when they need to use it.
Buying a home is a major investment. Most people buy their homes using mortgages. They pay for the house for 10-30 years and after repaying the mortgage the house becomes theirs. The homeowner will need Investment Planning because this is a long-term investment which will tie money for many years. Which type of the house do I want? Which location? How much does the house cost? How much can I afford to pay? These are some of the questions the homeowner will need to ask. Luckily there are online calculators which can be used to calculate the loan calculations to help the homeowner make informed decisions.
Most people invest in mutual funds because of the portfolio diversification and the assurance that the investment will be managed by professionals who will act in the best interests of the investors. Mutual funds pool the money together from the investors who become shareholders of the fund and invest it on their behalf. Investment planning on how much to invest in a mutual fund and hedge funds has to be done.
Many investors prefer to invest in the stock market. There are many shares of stock listed in the stock exchanges which investors can buy and sell through brokers and using electronic trading. The investor will need Investment Planning to invest in stocks depending on the return and risk. There are bonds and other marketable securities available in the stock market. Today investments have moved to the more complex features including options, swaps, futures and many others which the investor can leverage and earn high returns.
Government Bonds and Treasury bills have lower return on investment ROI but have the guarantee of the government. All people especially the senior citizens should invest in retirement schemes that will assure them of financial resources during retirement.