Heading to the marketShop smart and you, too, can make a lucrative investment.

Nobody can blame you for thinking investment planning isn’t for regular people. Watch business news on TV or scan the top stories online and you’ll soon realise that markets react – all the time and to everything, sometimes violently. There’s an endless parade of new highs or historic lows. And after a big crash, recovery seems to take forever.

It doesn’t feel like a safe place to be ­– certainly not with your hard-earned savings in hand. But if you bear in mind a few basic rules and get some input from a professional, you can make a sensible and lucrative investment.

The big idea is simple. Get the most out of your current assets and future savings. Start by considering what you really want from your investments:

  • Do you want to play safe and make sure you don’t lose any money?
  • Do you need an income now for your retirement years?
  • Would you like your money to grow so that you have a better income later on?

Knowing your priorities is a solid start. If you’ll need money to buy a car in a few years or send your teen to university, you’d want safety first. If you’re saving for retirement, you’d like it to grow as much as possible.

Drawing up an investment plan starts with a close look at your financial situation. Picture your goals. Decide how much risk you can handle. Factor in your tax status.

Now weigh options and pick the right ones for you. Don’t think the key to success is buying and selling at just the right moment. How long you stay in is much more important.

Every kind of investment has pros and cons. Cash, for instance, might seem a good choice. But a volatile market could dent your returns in the long run. Even so, some of your assets should be liquid so you can get to them in a crisis.

Each asset has its own levels of risk and return, so invest in a spread: Shares, property, bonds, cash.

Always consider your investments as a whole, because they won’t all grow at the same rate. Don’t look too closely at one asset on its own – you might get jumpy if it’s in a slump and then make a wrong decision.

A more diverse portfolio carries less risk and offers a better chance of returns that trump the inflation rate.

Much of investment planning is common sense. It’s not all about you, for instance, so discuss your plans with your life partner and find common goals. Start investing as early as possible. Make sure you understand what your investing in. Find the right balance and put your faith in it – don’t panic if the markets is jittery.
And stick to your resolutions.

Ready for some investment planning? Consider talking to an Old Mutual adviser, who has the experience and market smarts to help you put together a portfolio that delivers when you want it.