Here are some tips how you develop a good investment plan:

1. Make a budget

Everyone has to make a budget to achieve some goals in their life. A budget is an overview of your expected income and expenses and shows how much money you can set aside to save and to invest. Investing a fixed amount monthly is often the best investment strategy because you don’t buy always on peak price.

2. Determine your investment profile

It is important you determine your investment profile because you may never take more risk than you can afford. The investment strategy of a defensive investor will be different for someone with a defensive, a balanced or an aggressive investor. For example, a defensive investor will invest for 25% in stocks and 75% in bonds while an aggressive investor invests for 75% in stocks and 25% in bonds. A balanced investor will invest 50% in bonds and 50% in shares.

3. Your age and your income

People between 20 and 40 can afford to take more risk than people who are near retirement. Income and age are two important factors to determine your investment profile. Younger people will often more invest in stocks or equity funds than older people because these investments require a longer time horizon.

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