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If you live abroad, you should consider having an investment portfolio back home.  Some investors are making rapid investment decisions without considering their long-term financial goals. Before you make any decision, consider these areas of importance:

  1. Draw a personal financial roadmap.Before you make any investing decision, sit down and take an honest look at your entire financial situation. The first step to successful investing is figuring out your goals and risk tolerance -either on your own or with the help of a financial professional.  There is no guarantee that you’ll make money from your investments. But if you follow through with an intelligent plan, you should be able to gain financial security over the years and enjoy the benefits of managing your money.
  2. Evaluate your comfort zone in taking on risk.  All investments involve some degree of risk. If you intend to purchase securities – such as stocks, bonds, or mutual funds- it’s important that you understand before you invest that you could lose some or all of your money.  Unlike deposits in banks and co-operative Sacco’s, the money you invest in securities typically is not insured.  You could lose your principal, which is the amount you’ve invested.  That’s true even if you purchase your investments through a bank.
  3. Consider an appropriate mix of investments.By including asset categories with investment returns that move up and down under different market conditions within a portfolio, an investor can help protect against significant losses.  Historically, the returns of the three major asset categories – stocks, bonds, and cash – have not moved up and down at the same time. By investing in more than one asset category, you’ll reduce the risk that you’ll lose money and your portfolio’s overall investment returns will have a smoother ride.
  4. Asset allocation is important because it has major impact on whether you will meet your financial goal.  If you don’t include enough risk in your portfolio, your investments may not earn enough return to meet your goals.
  5. Create and maintain an emergency fund.Most smart investors put enough money in a savings product to cover an emergency, like sudden unemployment.  Some make sure they have up to six months of their income in savings so that they know it will absolutely be there for them when they need it.
  6. Pay off high interest credit card debt. There is no investment strategy anywhere that pays off as well as, or with less risk than, merely paying off all high interest debt you may have. If you owe money on high interest credit cards, the wisest thing you can do under any market conditions is to pay off the same.

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