Now more than ever, investors have become more cautious in picking out places where they can invest their money. The recent global financial crisis is still fresh in the minds of people all over the world, and no one wants a repeat of what happened then, when currencies became weak and long-term savings lost their value.

Well now things are getting rosier. We have all learned lessons from the global financial crisis and its aftermath. One important lesson is to invest with your eyes wide open. That may seem easy to say but just how do you do that, you may ask?

Put simply, that means invest only in schemes you understand. Some investment vehicles are a little complicated to understand, and investors may find out too late that these are not the right ones for them.


Like clothes, investments must fit your personality. Investors who are aggressive in their positions usually have time on their hands, can take on risks and are interested in investment that offer high returns. They are usually suited for stocks. They probably won't mind the ups and downs of the market, bearing in mind that in the long run, they may be able to realize a much bigger profit. Those more conservative and who want to take things slow and sure may concentrate their investments in bonds and government securities.

What investments can be considered good this 2010? We don't have the capacity to say what is sure to happen in the future, so we cannot guarantee which investment will earn the most this year. But these tips below may help you in determining the right investment for you.

1. Ask yourself: What is your investment goal? Maybe you would like to invest your savings so it will grow more, enough to become down payment for a house in the future. Or maybe you are looking at starting your nest egg which you will use upon your retirement 30 years from now. Still another investment goal may be to grow your savings so that you will reach your emergency fund (six months' worth of expenses at least) in a year's time. By identifying your investment goal, you are making your plans more concrete, which will help you in mapping out your investment strategy.

2. Ask yourself: How much time do you have to invest? Once you know your savings goal, you will be able to determine how much time you have to leave your money in the investment before you need it. This is essential in identifying the right investment for you. Long-term funds may be held in stocks and bonds, while short-term funds needed for next year's tuition fees or emergency fund goal may be placed in a unit investment trust fund or mutual fund investing in the money market.

3. Study all aspects of an investment before committing to put money in. Don't just ask how much it may earn in the future or how much the interest rate is; find out how it works and how it behaves in the market. Stocks are pretty volatile, with market prices fluctuating due to demand and supply. Time deposits are safe but interest may be low, although higher than that offered by savings accounts. With bonds, you have to hold your money for the term of the bond to realize the full interest.

4. Research not only on how that particular investment has performed during the past year or so, but on what potential it has in the future. Has it started to recover and is on its way up after the global financial crisis? Note however that past performance is not indicative of future performance. You should be wary that though the performance of a particular investment may be good in the past, it is not a guarantee that it will also behave the same way in the future. Also, if it appears too good to be true, it's probably not true. Beware of investment scams.


5. Be open to studying new investment options. Depending on one's profile, investors may consider getting out of their comfort zone and consider new investment vehicles. For example, avid time deposit clients may look into government securities.

Good Luck and God Speed.