4 Questions to Ask Yourself Before Investing

Sure, investing can be daunting. It’s especially intimidating for those who have never invested before. Sometimes, investing can seem exclusive, as though it’s reserved for the wealthy. However, thanks to the Internet and investment apps, people are more in touch than ever with their financial opportunities. If you’ve considered investing, there’s no time like the present.

Endless resources and tools are available to help you learn how to invest and when. Whether you see investing as a new hobby or a lifelong track to wealth, it’s a great time to educate yourself on what’s out there. Before you begin, there are a few questions to ask yourself—four questions, to be exact.

Before You Invest, Ask…

What is my goal?

Financial decisions should never be arbitrary, especially investing. It’s best to make choices based on logic and analysis, rather than emotion. So, before you invest, check-in with yourself. Why are you investing? What is it you hope to gain? If you know the answer to these questions, you can choose an investment that aligns with your short- and long-term goals.

Do I understand this investment?

This isn’t to say that you have to be a financial professional to invest. In fact, we champion anyone who wants to engage in their finances actively. Just be sure that before you jump in, you know what you’re investing in. Research the investment and all associated fees. It’s best not to make the commitment until you fully understand where you’re putting your money and what it’s working toward. Your financial advisor can offer advice on whether the investment you’re considering aligns with your needs.

Am I prepared if this investment goes to zero?

Have you ever heard the saying “don’t put all your eggs in one basket”? It means don’t exhaust your resources all in one place, just in case the outcome isn’t what you had hoped. The same applies here. If all of your money is invested in one place, you will be devastated if it drops dramatically—and rightfully so! It’s crucial to properly diversify your investments and to help ensure you’re protected in other areas of your financial plan. When you plan for a drop and strengthen other areas of your portfolio, you’re setting yourself up for success.

Should I manage this investment on my own?

The answer to this question depends on how financially savvy you are. With that said, everyone, even financial professionals, can benefit from having an outside perspective on their investment portfolio. Whether to consult someone on your investments is a personal decision; however, consider that a third-party’s eyes can help you determine whether something is a sound investment. An advisor can walk you through the associate fees and the investment’s potential to have a clear understanding of what you’re entering into. After all, when it comes to where your money could make the biggest impact, you want to be as aware as possible.

These four questions will get you on the right track to make your first investment. When you enter into this phase of your financial plan, you want to be sure you’re ready for both the good and the bad with a well-diversified portfolio. Your financial advisor is the best resource to consult on investments. An advisor can teach and empower you to make wise financial decisions that align with your long-term plan. Because investing has a level of chance, you can work with an advisor to ensure you’re covered and moving forward no matter how the winds change.

Southwestern Investment Group is your local investing professional. Our advisors listen to your needs, creating a financial plan that aligns with your life’s goals, financial and otherwise. Contact us today to find an advisor near you.

Legal Disclaimer

More Articles


    September 25, 2020

    Homewood, AL (September 25, 2020)—Southwestern Investment Group, an independent wealth management company

    Read More

  • teaching-kids-about-money

    4 Priceless Money Lessons for Kids

    August 11, 2020

    Financial Literacy: A gift that lasts a lifetime. From things like financial

    Read More


    July 7, 2022

    FRANKLIN, Tenn., July 7, 2022 — Southwestern Investment Group, an independent wealth

    Read More

< Back to Resources