How and where you can Invest?

There are financial institutions that specialize in managing the investment. These include banks, savings and loans companies, stock brokerage firms, investment advisory firms. A variety of investment avenues are offered by the different financial institutions and they are always happy to advise.

NB: Always seek professional advice before you invest.

How to choose the right Investment?

Various factors can inform your choice of investment products. Weigh these factors carefully and make the decision. The factors include:

  • Your objective for investing
  • Your current Income
  • Your age
  • Your risk tolerance level

In choosing your investment, there are seven questions to ask before you make an investment decision.  Once you know your asset mix, you can choose specific investments. Before you choose an investment, understand how it works and the risks involved.

Ask yourself:

  1. How does the investment work? Do you understand the investment well enough to explain it to someone else?
  2. What are your goals? Are you looking for safety, income or growth from this investment? Or both growth and income?
  3. What are the risks of this investment? Are you comfortable taking these risks?
  4. How much do you expect to earn on this investment? Is this realistic?
  5. How long do you plan to invest? Is this a short-, medium- or long-term investment?
  6. What are the costs to buy, hold and sell the investment? And will you pay taxes on the money you earn?
  7. What other investments do you have already? How does this investment fit with your other investments? How will it change your asset mix

There are many investment options, which however may not give you a return as you would wish. The following are some of the investments you could put your money into depending on your location.

  • Investing in assets that appreciate in value e.g. land
  • Investing in projects/ventures for speculation-Shares
  • Investing in assets that start earning immediately like starting a shop or hotel
  • Investing in assets that offer services to other people e.g. taxi, pick up
  • Putting money in a joint business e.g. setting up a company or cooperative. You should work with people you trust
  • Investing in more than one project, like having a farm and a shop can spread risks

Before you make a decision to invest and what to invest in, consult an investment advisor or stockbroker who is in the best position to help you define clearly your investment objectives and determine which investments are best suited for you

Risks in Investment

Every investment comes with a risk. There is a risk of losing money when your investments lose value, are stolen, mismanaged, destroyed or damaged. If you are investing through a bank or you use an investment advisor, find out from them how to best minimize risk of loss.  Some investments such as government securities, bonds and treasury bills usually have very little risks. Invest according to how much risk you are willing to take. Riskier investments may earn you higher profits, if they are successful – but there is a greater chance that you can lose some or all of your money.

You will be a successful investor if you always review the information you are given, ask questions and make sure you understand and are comfortable with the way your investment is being managed.

  • Keep in touch with the financial institution or investment firm so that you can monitor your investments
  • Invest regularly
  • Keep your investment receipt or certificate in a safe place

Register for Financial Literacy Training

Register Now for Financial Literacy Training at The Uganda Institute of Banking & Financial Services

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