Nowadays, financial investment is a topic of interest and strongly influences the economy. It’s possible for anyone to invest in Finance as long as all requirements are met. However, how to invest effectively, avoid the risks of losing money is not easy. This article will share with beginners some key tips to invest effectively.
There are some types of assets for your financial investment; each one has its own distinct features, risks and benefits. Once you are familiar with these types, you’d be able to consider reasonably investing in different types at the same time, according to your personal circumstances and risk tolerance. The following is an introduction to some kinds of assets.
1. Real Estate
It is estimated that the real estate market’s average profit is about 8-12 {70b45ee78418f42abd3d9f3844ba2e48a8b0129d2b75d7c15f341553206e1abb} per year. This is one of the investment channels that yields high profit which attracts a lot of investors, especially ones in metropolitan areas where the demand for housing has been increasing.
However, before taking the plunge into real estate investment, you should keep in mind that being a part of this segment requires a lot of capital and contains risks due to the market’s fluctuation.
2. Forex
Forex refers to foreign exchange transactions. Investing in this market means you’re involved in the trading of different currencies in the market. The highlight of the Forex market is the high returns and the extremely low capital needed – only about 100 – 200 USD. However, with that comes risks.
Therefore, before joining, you should get a good understanding in this field and thoroughly study this type of financial investment.
3. Stock Market
The most common and most beneficial channel for an investor is the stock market. When you buy a stock, you will then own a small portion of the company which released the said stock. When the company shows a profit, it may pay you a portion of those profits in dividends based on how much of their share you own. When the value of the company grows over time, so does the price of the shares you bought, which means you can sell them at a later date for a profit.
Before you invest in a company, take some time to thoroughly familiarize yourself with its management, and make sure that you believe in the growth potential of the said company.
4. Mutual funds
Investing your money in funds allows you to purchase many stocks, bonds or other investment all at once. Mutual funds diversify by pooling investor money and using it to buy a basket of investments that align with the funds’ schemel.
Funds may be efficiently managed by a professional manager who actively selects the types of investment or follow up with the indexes to make the right decision.
5. Bank interest rate
This can be considered a relatively safe investment form and suitable for beginners in the field of financial investment. Beginners often do not have much knowledge or experience in investing their capital so they often choose to deposit money in a bank and gain interest monthly or annually. However, the profit is not much compared to other types of investment.
6. Gold
Perhaps this is a very familiar form of investment for Vietnamese as of its simpleness, low capital, and stable profit, which is because the value of gold is quite constant. However, this is also an investment channel that is both risky and not highly profitable. There are three main ways to invest in gold: buying the gold itself, gold funds, or buying gold options.
Individuals who choose gold ingots as their form of investment may store them in ingot or coin form. Mutual funds and exchange-traded funds that invest in bullion or bullion and gold stocks offer a more liquid and low-cost way to invest. More sophisticated investors might trade options on gold future contracts.
7. Cryptocurrency
Although cryptocurrency has only been around for a short time, it’s already expanded into a wide, convoluted universe that can be difficult to understand for the uninitiated. But with Bitcoin and other cryptocurrencies seeing wild fluctuations in price, there’s the opportunity for big gains for those who can stomach the risk.
Currently, there are many different types of cryptocurrencies, one of which is being widely searched for and invested in: Eco points. According to the release roadmap, Eco points will increase in value. However, the more people hoard, the more scarce Eco will be and the higher the price will be, benefiting both business people and customers. Ecoworld Corporation pledges to redeem your Eco points at 70{70b45ee78418f42abd3d9f3844ba2e48a8b0129d2b75d7c15f341553206e1abb} of the payment value. You absolutely do not need to worry about the great risk when owning Eco.
In short, to simply save your money, you may choose a savings account or a certificate of deposit. However, investing is a different story – it is about making your money grow while minimizing risks, while savings is about protecting the funds that you’ve collected from risks altogether. Choosing the right financial investment to reap benefits from your funds depends on your personal circumstances.
