Have some basic knowledge of the markets

Once you understand the key disciplines and concepts that underpin acquiring wealth and have begun to implement them, your focus may then change and you may find yourself more interested in managing and increasing your wealth.

Becoming wealthier

If you take the attitude that the stock market is for cash that you can spare, and that you may not reap any rewards for some time, then you probably have the right temperament for investing.

You should be a cool and sensible investor, not a gambler, looking for the eventual returns that you can get with shares, which long- term can be better than other forms of investment.

Set your targets

Decide on an acceptable amount of risk. You must establish how much risk you are prepared to take by investing in shares at all, never mind the smaller, newer companies with their potential for failure as well for growth in share price and dividends.

Set your time lines. Is your investment going to be short, medium or long term?

If long-term, then a certain amount of volatility in the current share price of your investment can be disregarded, while short-term investments should be in stable businesses.

Medium? Take a view halfway between.

Income or capital growth

For income, seek companies with higher yield figures, or dividends — BP shares were until recently a staple. For growth, look for companies with lower dividends, but higher corporate growth potential — Microsoft shares did not pay dividends between 1986 and 2003, but their value went up more than a hundredfold.

Invest in companies you respect and have an interest in.

Can you live with armaments, tobacco or pharmaceutical concerns? You'll be spending time with these companies.

Managing your portfolio

Some people love looking after their own investments and financial futures. For them, the combination of analysing the markets, acting on their own hunches, and keeping their personal portfolio up to date is irresistible. But do you have the time or inclination?

Some advice

If you are seeking professional help you can maximise its benefits by following this advice:

Swat up on the markets. Your advisers or managers will have endless information and financial products at their fingertips, but you'll get better advice if you have some basic current knowledge of the markets and your investment options and you are able to discuss investments and the markets with then intelligently.

Stay up to date with the news. If you read the City pages of the newspapers and keep up to date with economic news and trends, you won't be far behind when it comes to the evaluation of your situation and keeping your portfolio up to date.

Check it yourself

Turn private detective. No matter how well respected your adviser or manager, don't be lulled into a false sense of security by their reputation.

It pays to check that the performance of their investment recommendations has been as good as, or better than the market average.

Take the long view. Even if your advisers recommendations have been rock solid, would just investing your money in a tracker fund have given you a better return when the management fees you're paying are taken into account?

Be decisive. If you've done your research and are well acquainted with the facts and figures, you can make decisions with your advisers to adjust your portfolio — or you can even make the decision to strike out on your own.

The writer is senior consultant at Acuma Wealth Management, Dubai. Opinions expressed here are his own and do not necessarily reflect that of Gulf News.