By Nipapun Poonsateansup CFP ^® Dependent Financial Planner

Believe that many people will have heard this “One who knows the enemy and knows himself will not be in danger in a hundred battles.” The one who said this is Sun Tzu who was a Chinese general, military strategist, writer, and philosopher who lived in the Eastern Zhou period of ancient China. This means that 'no matter what you do, we need to know ourselves and our opponents very well. No matter what the situation, we will not be defeated by another.

We can apply this term to investing as well. By 'knowing us' is knowing ourselves, know what our investment goal is, how long do we can invest, and how much risk can we accept. To 'know-them' is to recognize various types of investment assets, what are the risks and returns, does they meet our investment goal. Also have knowledge and understanding of the economy that may affect our investment. That means before we decide to invest, we need to know the following;

• Investment Objective : We need to know. What is our investment goal? For example, keep the principal safe, increase the value of money (at least to beat inflation) to maintain the purchasing power, or to grow money. And to serve various purposes such as education for children, retirement etc.
  
  
• Expected return on investmen t: How to achieve that investment, it depends on our initial investments, investment period, is it long enough, and do we have more money to invest more or not?
  
  
• Ability to take risk and willingness to take risk: These 2 thigs are different. Factors that determine the ability to take risks such as age, income and investment period. And the willingness to risk is the attitude, inclination, or interest in each type of investment asset.
  
  

The ability to accept risk will tell what kind of assets we can invest in. While willingness to risk is said are we suitable for that type of asset. For example, young people can accept at high risk, so they can invest in risky assets such as stock and equity funds. However, if they are not willing to risk so much, it would be better to invest in lower risk assets such as bonds, fixed income bonds. So, know ourselves before investing, like how much we can accept and be willing to risk or lose. We will be able to select the most appropriate investment for ourselves.

• Know and understand the assets to invest: When you know that you are interested in any type of investment. Should ask yourself before investing that how much understanding of the asset, including return, risk and trading method. If you don’t know yet or not sure, should seek information about the assets first. For instance, iff you are interested in investing in mutual funds, you should read the prospectus to learn about it first. What is the investment policies? What assets do they invest in? Is there a dividend policy? How much risk is there? Does it meet our acceptable risk level? Understanding the investment asset is important. Even we invest in high risk assets, we have a good knowledge of the asset that we invest in. We will have more opportunity to generate more returns. Most important thing, do not invest in something that we do not have knowledge or understanding.
  
  
  
• What types of investments are taxable & tax free?
  
  

1. Investments in all types of financial assets that yield returns in the form of interest, such as fixed deposits, government bonds, and debentures. Interest will be withholding tax at 15%
   
2. Investments in all types of financial assets that provide returns in the form of dividends, such as ordinary shares and mutual funds, which pay dividends. Dividends received will be subject to withholding tax at 10%
   
3. Capital Gain is the form of profit derived from an increase in value. It is a surplus of capital. Earnings from Capital Gain are taxed in certain countries (Capital Gains Tax). In Thailand proceeds from the sale or transfer of securities in the SET now no tax is imposed.

In addition, the important thing that investors should have is the commitment. To be successful in anything, we are the most important factor. Even if the investment plan is good, the lack of commitment, lack of discipline and lack of patience to save investment will reach the goal hardly. So, when you set your own financial goals, you must get on with the plan. Do not procrastinate] because you may not reach the intended purpose.

After the investment started, the investment plan should be assessed and reviewed regularly, such as every 6 months or 12 months or when there are major events that may affect the return on investment. For example, the stock market volatility or interest rate adjustments. To improve our investment plan in line with the current situation. In summary, if we are planning investment well, discipline in action plan and plan is reviewed regularly, opportunity to achieve financial success as intended is not too far.