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An investment is a property that is purchased with the expectation of future profit. Any sort of property can become an investment, but the main sorts of properties used in this manner are real estate, stocks and bonds. Most people think of retirement planning when they hear the word investment, but you can also invest to pay for education expenses or to build wealth. The key to successful investing is to have a good understanding of what your goals are. It takes time to make money by investing. Having clear investment goals defined helps people stay focused on desired long-term outcomes.

Once you have decided on what your investment goals are, you will need to select investment vehicles that best suit your needs. You will also need to assess what level of risk you are comfortable taking. There is a certain amount of risk taken on with every investment that is purchased. That is, you are never guaranteed that you will make money when investing. In many instances, you may even lose money! Keeping this risk of losing money in mind, it is important that you educate yourself about investing and get professional guidance when making investment choices. The health of your finances is at stake, and you don't want to mess things up.

An investment professional will be able to tell you what investments are more sensible risks (given your risk-tolerance) and what investments are too risky and should be avoided. Unfortunately, there is never any way to avoid taking on risk when investing, even when you take the best professional advice to heart. Taking on good risk is what allows you to have better returns. In fact, the greater the risk you take on, the greater the potential for high returns (and also negative consequences). Returns are the reward you get for taking on investment risks.

In addition to taking risk into account, you will need to adjust your investment strategy to take into account the amount of time you have to achieve your investment goals. You can invest more aggressively when you have longer periods of time (15 to 30 years, say) before you need to use the money. This is true, in part, because when you have longer periods of time to invest, you can afford to make more mistakes and still recover. Having a longer period of time to invest also enables you to keep money in more volatile (but also more lucrative) investments, secure in the knowledge that periods of poor performance will generally (statistically) be outweighed by periods of better performance. Time tends to reduce the effective volatility (and thus the effective risk) you will experience in the market. You can afford to take on more risk if you have a longer time horizon to invest. If you need to have access to money in the short term, however (say, within the next few years), you will want to take on less investment risk.