• Learn about investing
• Strategies and considerations
• Establish your investment objectives
• What do I want from my investment?
• What level of risk will I accept?
• How can I help reduce my level of risk?

What do I want from my investment?

Income, growth or balanced?

Generally, people buy investments for one of three reasons:

• To receive an income from them in the form of dividends
• To hopefully see a growth in their value and sell them at a profit
• A combination of the above, known as balanced

Income from your investment

If you're looking for an income, choose a company that pays a high yield and compare it with other companies in the sector. But beware, while an extremely high dividend may appear attractive, it may be a one-off and not truly representative of the income you can expect in the long term.

As such there are three main things to consider when buying shares for income:

1. To what extent is the dividend covered?
2. Is the company regularly increasing the dividend year on year?
3. What has been the historic trend?

Investing in shares for growth

There are four main things to consider when buying shares for growth:

1. If the company you are looking to invest in is expanding via acquisition, check out the logic behind the acquisition. Especially if it's based on cost savings.
2. If the company is developing new technology, products or services, try to get an idea of development time scales.
3. If the company is entering new overseas markets, be aware of local conditions such as the political climate and taxation issues.
4. If the company is an attractive takeover target there may be a short-term hike in shares followed by a drop, so keep an eye on the news.

Balanced

Companies that pay out a proportion of their returns as dividends while retaining a certain amount for ongoing investment represent the best option for giving you a balance between income and growth.