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How to find the right investment for you

Investment has become a hot topic in the Philippines lately due to the plethora of positive economic news: the recent Fitch credit upgrade, the stock market hitting high after high, and the real estate boom. It seems to make perfect sense to start putting your money to work, but how to choose the right investment? With so many financial instruments out there, it's quite difficult to decide. So before sinking your hard-earned savings into any investment, take a few moments to consider these questions.

What are you investing for?

In the rush to make money, it's easy to overlook this most basic of steps: thinking up a clear financial goal. Putting your money in any instrument without deciding where you want to go with it is like going on a roadtrip with no destination in mind—you and your money could wind up just about anywhere, and rarely the place you want to be at.

So decide: is your money for emergency funds? Is it savings for a big purchase, like a car or a home? Is it for your children's future, or your own retirement? Are you building a business? What kind of lifestyle do you want to create for yourself?

Whatever your goal is, it certainly carries a price tag. Take time to determine that amount as it will save you a lot of trouble later on. The clearer you are about what you want, the easier it is to realize it.

How long do you need to invest?

This is a follow-up question to your financial goal: determining your time horizon. Investments may be short-term, medium-term, or long-term. Some investments, like bank deposits, are liquid, meaning they can be converted to cash in short notice. Others, like real estate, require time to make a return. It pays to be clear about what you need. You don't want to be in a long-term investment if you'll be needing your money back in a year or two, and short-term

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