Things you need to ask yourself before you invest

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Editor's note: Every once in a while, you come across management advice that actually makes sense. A week or so ago, I read about the “7 Whys” technique developed as part of Toyota’s factory quality push. The idea is to understand the root cause of why you’re doing what you’re doing—very relevant when you are actively investing. Many of us invest, but not all of us pause to evaluate if those investments make sense for us, our lives and our goals. So, before you act on the next bit of investment advice you receive, here are some questions you should ask yourself before you sign the check (or complete the transaction online as the case may be). 1. What am I putting money in? Do you know exactly what you’re putting money in? For example, when you’re investing in a mutual fund, you’re buying a share in a large pool of money that has been invested in specific financial instruments, like shares or bonds. This pool of money is operated by a fund manager who is a highly qualified expert in the …