What is Personal Investing?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 28 September 2019
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Personal investing is one of the more important components of personal finance. Essentially, this type of investing activity centers on the investment activity that is undertaken by an individual. Often, the investing efforts are focused on creating a secure financial cushion for use in later years, and may include investment activity such as Certificates of Deposit, savings accounts, participating in pension plans, and the purchase of stocks, bonds and other options.

Since the focus of personal investing is often a key part of retirement planning, many people choose to create a personal investment portfolio that is composed of several different options. The foundation for the portfolio may be a series of very safe investments that provide a small but consistent return. Investments of this type would include savings accounts, individual retirement accounts, and similar saving strategies offered at local banks.

Once the foundation of the portfolio is created, the next phase of personal investing involves seeking out investment opportunities that carry the potential for a higher return, but also involve assuming a greater amount of risk. There are several options in this category that will offer more return than the various options at the local bank. These include opportunities like bond issues and some commodities trading. Stocks in companies that have a long track record for stability are also excellent for returns that come with a relatively limited amount of risk.


For investors who wish to earn a high return and are willing to accept a greater risk, there is always the possibility of fleshing out the investment portfolio with highly volatile investments. This can include such opportunities as buying shares in a new and as yet unproven business, taking a chance by investing in a new type of technology that shows promise of becoming extremely popular, or getting involved with the fast-paced trading that is common with currency trading. Keep in mind that with these more volatile possibilities, it is often necessary to pass credit requirements; this helps to ensure that the investor has the ability to pay if an investment does not go as projected.

Developing a personal investing strategy requires careful attention to several details. First, the individual should obtain investing advice from a competent financial professional. This will make it possible to strike a balance between adequately taking care of the needs of today and building a nest egg for the future. The personal investor should also understand his or her personal comfort level when it comes to more volatile investment options. By balancing personal investing goals with the needs and resources available, it is possible to develop a plan that will make retirement much more comfortable


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