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Even though it’s impossible for us to tell investors how to invest will definitely earn money, we will try to provide comprehensive information about investments. Some guidelines on wealth management are hereby provided in the hope of serving useful reference for investors.
I. Development of a plan
Working out a plan is the key to successful investment. Firstly, investors need to judge the real personal situation, such as personal financial position. Secondly, they should set investment objectives: purchase of a car, college tuitions of child(ren) or personal post-retirement life. After determining what in need, when the needs come, and how much to spend, investors can determine the investment approach suitable for themselves.
II. Long-term investment
Perhaps time is the best guarantee against risks. In a period of time, the bear market may last for several years due to stock market volatility. However, the historical experience shows that the investors who buy at the right time and are able to hold have a better performance than those who constantly attempt to predict the market and trade frequently.
III. Pre-investment investigation
Good preparation is another important means to reduce investment risks.
1. Checking the qualifications of securities companies and their employees.
2. Full understanding of and investigation into the listed company before investment.
Investors should carefully study the information publicly disclosed by companies. Regulators require them to disclose in a detailed and authentic manner. The prospectus which discloses the most detailed information shall be read through with utmost attention.
3. Guarding against all kinds of traps claiming to help investors get rich quickly.
It is likely to be a financial fraud when investors are offered an ultra-high ROI product or are urged to buy without detailed understanding.
IV. Avoiding the cost of delay
Time is one of the most important factors determining the growth rate of money. Suppose the rate of return on investment is 8%, if a person deposit RMB5 a week from the age of 18, his or her investment will grow to RMB13,4000 at the age of 65. If the person starts investing from the age of 40, he or she has to deposit RMB32 a week in order to get the same proceeds at the age of 65.
(Source: Office Website of Securities Association of China)