There are many techniques of investment, but the basic process is quite simple: know what you are buying, particularly with respect to three things - liquidity, risk and return - the Securities & Futures Commission says.

In his monthly column, the commission's 'Dr Wise' said investment is a process, and all processes must be learnt. There is a price to learning, including the fact that we can make losses.

"If you do not understand, ask the experts. Most of us turn to experts for advice in everything, and choosing the right broker or banker is an important decision," Dr Wise said.

"A professional who gives you advice needs to understand what is your appetite for risk and your need for returns and liquidity before he can provide the right advice. Get a second opinion if you are not sure. Because it is your money, only you, the investor, has the prerogative to decide whether to buy or to sell. Good investment needs skills that a rational investor must learn."

Turning to the basis of investing, Dr Wise said as the market goes up and down, the key decision after the buy decision is the decision to sell, and when.

"The basis of investing is to buy low and sell high," Dr Wise said, advising investors to re-think their investment if there is information that a company is doing badly for one reason or other, and the price begins to fall.

"Knowing your own strengths and weaknesses is not easy. This is why investment is not easily taught, but has to be learnt. I want to make it clear that I am not saying that this or any particular time is the time to take profits. Neither am I saying that buy-and-hold is necessarily a bad strategy - in fact, some smart, patient and successful long-term investors simply buy and hold good quality stocks and make profits in the long run. My job as a regulator is to remind investors to think very carefully about the risks that they are undertaking."

Dr Wise is a fictitious character representing market specialists and experts at the commission.