The Best Investment OptionsChoosing the best investment for you depends on your personal circumstances as well as general market conditions. For example, a good investment for a long-term retirement plan may not essentially be a good investment for higher education expenses. In each case, the right investment is a balance of three things: Liquidity, Safety and Return.
Liquidity - how accessible is your money?How easily an investment can be converted to cash, since part of your invested money must be available to cover any financial emergencies.
Safety - what is the risk involved?The biggest risk is the risk of losing the money you have invested. Another equally important risk is that your investments will not provide enough growth or income to offset the impact of inflation, which could lead to a gradual increase in the cost of living. There are additional risks as well (like decline in economic growth). But the biggest risk of all is not investing at all.
Return - what can you expect to get back on your investment?Investments are made for the purpose of generating returns. Safe investments often promise a specific, though limited return. Those that involve more risk offer the opportunity to make - or lose - a lot of money.