Investing is when you use your savings to buy shares of The Investors Centre or bonds in companies for the purpose of growing them or earning higher profits. In the past, investments also included things like real estate and commodities, but today they are mostly associated with financial instruments that allow you to lend your money to companies or businesses that want to put it to work for them.

One thing to remember about investing is that it can be risky. Stocks, for example, have the potential to provide exceptional returns but can fall back to earth quickly. The key is to have a clear plan and stay committed to it even when markets are volatile. Then you can focus on long-term returns and the investment strategy that will help you get there.

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You should consider your own situation and decide if you are comfortable taking some risks with your money. Some people can afford to take more risk than others because they have a steady source of income, or more assets that could cushion the impact of a bad year for the market. You should also keep in mind inflation rates when evaluating the potential return on an investment, because an after-inflation rate of 5 percent might only be worth 1 percent in real terms.

Finally, you should evaluate the cost of any fees involved in an investment and make a conscious decision about whether to Do-It-Yourself (DIY) or work with an expert. Luckily, more resources are available than ever for investors, including robo-advisors that can create diversified portfolios at low cost and fee-only financial planners who do not earn commissions on the products they sell to clients.