Are you interested in investing in an agribusiness scheme? This alternative investment offers great benefits, especially for spreading your money around. If you are interested in a brief introduction to what an agribusiness scheme is, check out our What is an Agribusiness Investment Scheme? feature. Whether you already have your money invested in an agribusiness scheme or are considering to do so, here is a list of our top tips to consider before investing.
1. Make sure the investment aligns with your goals
How does the particular agribusiness scheme fit into your overall financial plan, and how does it help you achieve your financial goals? When investing your money, you want to have them compliment your goals. Having a financial goal with a strategy to meet this goal is always a good start. It is also a good idea to consult with a professional financial advisor to create an investment strategy and to assess the risk level you are willing to take.
2. There is no such thing as a guaranteed return on your investment
There is always a possibility that you may lose your money when investing. Agribusiness schemes are no different than the rest. Whenever you see promised words such as ‘guaranteed’ and ‘safe’ in a scheme you are eyeing, see this as a red flag and do some extra research before making a final consideration.
You also usually aren’t allowed to get your return earlier than promised, so if this might be unappealing to you, consider investing in other financial products that would allow you to redeem the investment before the end of the investment term.
3. Consider the golden rule: High returns = higher risks
Although the return may seem safe and modest, make sure to do your research because some may be riskier than they first appear. Even when the return doesn’t seem to be promising, it can be risky. That’s why it’s always a good idea to consider everything that is being offered, not just the return when investing in an agribusiness scheme. You can look at similar schemes and compare the return rates to see what others are offering, and this could help you understand the promise you have at hand.
Always ask yourself if the return you are being offered is greater than the risk you are willing to take when investing in any agribusiness scheme. Consulting with a financial advisor is a good step if you aren’t sure of the risks involved.
4. Do your research
This may seem like an obvious tip, but really dig-into any material you can get your hands on in order to find out everything about the investment you wish to make. Always understand the investment scheme’s risks and features.
The company you wish to invest in should always give you a Product Disclosure Statement (PDS). A PDS is important because it tells you how the investment scheme should progress and how it works. A PDS should explain the features and risk involved, tell you what fees you should pay, provide information on certain indicators that will help you assess the risks, and set key terms of any contracts that you authorise the entitled company to enter on your behalf. Use the PDS as a tool in researching the investment scheme, but do your own research or consult with a professional if you need more help in your decision.
5. Spread your money around instead of investing in one scheme
Don’t put all your eggs in one basket. It’s always safer to invest in diversified investment types than in just one scheme. Investing in different schemes is known as ‘diversification.’ Instead of taking a big risk by taking on just one scheme, try building diversified investment types, also known as ‘asset classes.’ Spreading your investments depends on your goals in mind and how much risk you can afford. If you need help defining your financial goals, you can consider seeking a certified financial adviser for help.
6. Consult with a professional financial adviser
Doing your own research is, of course, the starting point, but taking on a professional’s advice will make you more confident when investing your money. Looking for a financial advisor can mean many things. It depends on what kind of advice and goal you have in mind. First, consider what type of services you desire. Then, see what your budget on hiring the service is, and finally, check the qualifications the advisor has. You can find an advisor online, or maybe get a referral from someone you know. It is always helpful to have an extra set of eyes helping you choose your next investment scheme.
Need some help in finding out how to choose a financial advisor? Our feature How to Choose a Financial Advisor might help.
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