In addition to return and risk, there are several important factors to consider when choosing a financial product:
- Liquidity: Liquidity refers to the ability of an asset to be able to liquidate quickly when needed. If you may need to access funds in the short term, it is important to choose products with good liquidity. For example, demand deposits and money funds usually have high liquidity.
- Investment term: Different financial products have different investment term requirements.
Different financial products have different investment term requirements. You need to consider your capital utilisation plan and investment objectives and choose a product that matches them. Long-term investment may bring higher returns, but you also need to bear more risks of market fluctuations. - Fees and costs: Some financial products may charge
various fees and charges such as management fees, sales fees and redemption fees. These fees will have a direct impact on your actual returns, so when choosing a product, you should carefully compare the fee structure of different products. - Investment objectives and risk tolerance: Define your investment objectives, whether it is for short-term returns, long-term capital appreciation or stable cash flow. At the same time, assess your own risk tolerance and choose a product that matches it.
- Product transparency and credibility: Understand the product’s investment strategy, underlying assets and other information, and choose financial institutions and products with high transparency and good reputation. This can help you better assess the risk and quality of the product.
- Tax implications: Different financial products may be treated differently in terms of taxation. For example, equity investments may involve dividend tax and capital gains tax, while bond interest income may be subject to tax. Understanding tax policies may have an impact on your investment decisions.
- Personal circumstances and preferences: Your personal circumstances and preferences may also affect product selection. For example, if you have in-depth knowledge of a particular industry or sector, you may be more inclined to invest in related stocks or funds. In addition, your degree of active management of your investments, environmental awareness, etc. may also affect your choice.
- Market outlook and economic environment: Understanding the current market trends and economic environment can help you judge the potential performance of different financial products. Certain products may be more attractive under different market conditions.
- Professional advice and knowledge base: If you are not familiar with the financial sector, consider consulting a professional financial advisor or referring to the views of authoritative financial media and research organisations. At the same time, continuous learning and upgrading of your financial knowledge will also help you make more informed investment decisions.