There are plenty of investment opportunities. The forms of investment available on the market allow virtually everyone to multiply their money, according to their needs and capabilities. The most important thing is to choose the most advantageous investment opportunity for you. So the question arises, what is profitable to invest in?
What are the investment opportunities?
The question of what to invest in to gain and not lose is asked every day by virtually everyone who wants to effectively secure their future and that of their loved ones. If you are just starting your adventure with investments, you must be aware that safe investing with a certain profit does not exist. However, there are bank and non-bank forms of investment, which are burdened with a relatively low risk and allow you to obtain a satisfactory rate of return.
One of the most popular ways to invest savings are bank deposits. However, there is no denying that this is not a very cost-effective solution. The interest rates offered by banks are low, so such ways of investing money do not bring much profit, on the other hand, they are safe and do not expose the investor to a loss. Below you will find examples of financial investments that allow you to earn better than on bank deposits.
What to pay attention to when choosing a form of investment?
Start by figuring out how much money you’re going to put into the investment. The market in which you will be able to invest depends on your financial capabilities. If you decide to invest in the capital market (e.g. stock exchange, Forex), take into account the amount of commission to be paid.
Initially estimate how long you want your investment to last. In practice, you have to answer the question of how long you are able to wait for a potential profit. You have both short-term investments, on which you can earn in 1-2 years, and long-term investments, where a possible profit appears only after 5-10 years.
The risk you are able to accept is also of great importance. Of course, the higher the risk, the greater the potential profit, and vice versa. It is up to you to decide whether you prefer to invest in financial instruments with a potential large profit or in more stable and predictable ones with a small but practically certain profit.
Investment allocation criterion
You can invest in various ways. Depending on the investor’s expectations, age and knowledge of investment forms, the investment can be divided. This division also applies to the factors that affect them.
1. Subject of the investment
Due to the subject matter, investments are divided into:
tangible – a tangible object of investment, e.g. purchase of a house, land, gold, works of art;
financial – an intangible object of investment, e.g. shares, bonds, deposits, currencies.
2. Duration of the investment
Due to the time, investments are divided into:
short-term – up to 1 year,
medium-term – from 1 to 5 years,
long-term – over 5 years.
3. Nature of the investment
Due to the nature of the investment, we divide it into:
increasing the invested capital,
preserving the invested capital,
providing a steady income.
Investment opportunities in the financial market
Below you will find the types of financial investments.
1.Stock market – stocks
One of the possibilities is to invest in the stock market. The idea is simple: buy cheaper, sell more expensive. Investing in the stock market requires knowledge of the basic mechanisms of investing, but this is generally available knowledge that can be acquired by anyone, not only brokers. If you are systematic and stubborn in pursuing your goals, and at the same time have the ability to calculate, then this way of investing will appeal to you.
2. Treasury bonds and bills
Another way is to invest in bonds. Particularly noteworthy are state bonds, which are one of the safest forms of investing free capital and protect against inflation. Such bonds can be bought regularly for small sums, increasing their portfolio. Alternatively, you can invest in corporate bonds. The rate of return in their case is much higher than for state bonds, but the risk associated with it is also higher.
3. Mutual funds
With free funds, you can buy units of investment funds. Is it worth investing in mutual funds? This way of investing has many advantages – it is safe, allows you to invest even small amounts and is easy to give up. Additionally, the funds are diverse and have a diversified portfolio. Most banks allow you to buy investment funds online – all you need to do is log in to online banking and submit an appropriate instruction.
4. Investment policies
For supporters of long-term investing, there are investment policies. It is a combination of the allocation of funds in investment funds with the benefits of a traditional policy. The benefits in question include, m.in, no inheritance and gift tax, the possibility of avoiding Belka’s tax, partial exclusion of the policy from bailiff enforcement or insurance protection.
5. Bank accounts and deposits
For those who are afraid of losing money, the best way to invest will be to put money aside for a term deposit. In this way, you cannot earn much, but you can accumulate cash and invest in another instrument in the future. A big advantage of bank deposits is the convenience of investing and the lack of need for specialist knowledge on the subject. Everyone can compare deposits with each other to choose the best one. Setting up a deposit takes literally a few minutes and is very simple.
Alternative ways to invest savings
Another way to invest free cash is through cryptocurrencies. Probably everyone has heard about the existence of a currency called bitcoin. It is the most popular cryptocurrency, but there are several thousand other cryptocurrencies besides it, referred to as altcoins. Created in 2009 by unknown authors, the virtual cryptocurrency achieved very good results in 2017 and thus encouraged many investors to this form of investment. Buying and selling cryptocurrencies takes place on an exchange, where you can also trade your own cryptocurrencies.
Cryptocurrencies don’t appeal to you? You can invest the money you save in real estate. Investing funds in real estate in the near future will probably be the best way to multiply your capital. This conclusion can be based on interest rates, which have been at a very low level for a long time.