Before taking on the exercise of investment and its management, the investor is well advised to do the planning before hand and ask all the questions he or she can.
In answering these questions the investor would be able to get the aim (or objective). He would be empowered to think, analyze and act. The investor would be able to view and visualize the financial instruments available for investment. He would gain an understanding of when to invest and when to divest. This would also enable him to develop his investment system and also know where to go when he needs guidance.
To ask these questions before entering the multi-dimensional world of investment management is always a good idea. The questions that come to mind are:
WHY TO INVEST | WHAT TO INVEST | WHERE TO INVEST | WHEN TO INVEST | HOW TO INVEST
These questions are usually asked when an individual or investor wishes to start a project and would be a logical progression (or next steps) from the executive summary explained earlier in the introduction. With a view to elaborating and clarifying the relevance of these questions they have each been addressed individually.
The importance of these questions cannot be underplayed; indeed a proper documentation and record of these questions should be maintained by the investor, for future reference with a view towards effective and efficient course corrections with regard to the investment portfolio under management during its progress through the investment time horizon. It would also be relevant to be aware that, changes proposed to be made in the answer to one question would have a cascade effect and would subsequently require appropriate changes to be made in the answers of the other questions; to enable and ensure their integrity as a single composite unit.
To start with the investor would be willing to learn from both theoretical knowledge gained through the reading of relevant books on investment analysis and portfolio management and its application to the investment portfolio he may already have under management or develop in the future. In a sense it would be quite similar to learning a science subject; where you learn the theory first and then apply it to the experiments in real time. It is probably for this reason that investment management is often referred to as a science. This would lead to the investor developing his own investment system and methodology through practise and ironing out the deviations from expected portfolio performance over time; and thereafter would be referred to as an art. Of course, as change is the only constant in the investment environment; it would be fair to conclude that investment analysis and portfolio management while being both a science as well as an art is evolving with the passage of time.