When checking Analytics, it turned out that the previous article entitled “The best pick, or where to invest money” had a large number of hits and a low bounce rate. So it turned out that people are not only interested in how to invest money, but also where they can do it. Seeing how popular this subject was, I decided to continue this topic. So, join me for the second instalment – where to invest your money well?
The best area for investment – how to find it?
One of my friends always knew that he wanted to work as a journalist. But this profession resembles a tree with large branches. When choosing journalism, you can specialise in economy, culture, music, politics or social matters. You can also become a paparazzo, chase after celebrities and publish gossip online. My friend felt he wanted to study it, but he didn’t know exactly what he should specialise in. To find out, he tried to get to know almost every subject there is in journalism. Trying many things, he decided that he enjoys writing about music most. He wrote reviews, reports, columns and did interviews. He tried many fields of journalism, but this was the one he enjoyed most. But what does this have to do with the article?
When looking for something that you can invest your money in, it is worthwhile analysing almost all the possible options, as the investment market offers a large number of assets, platforms and investment areas. So how to decide on what to invest in?
- Look around you. Find out where you can invest your money. Look for information in professional publications or ask Uncle Google. This is the 21st century, so access to this kind of information is commonplace.
- Get to know everything. When getting to know different areas of investment, it’s also worth investigating all your possibilities. Analyse, read, learn the basics, increase your understanding and get ready.
- Try your hand at everything. If any of the markets particularly attracts your attention, make sure to try your hand at it. This can be done in one of two ways. The first method is using a so-called demo account, where you can make investments using virtual funds. The second method is assigning a small amount of money for trial investments. I personally recommend the demo account.
- Select the area of investment. Once you have got to know all the investment areas and have tried your hand at them, it’s time to choose a specific investment. It’s certainly worth doing because investing in several areas is unsustainable in the long term. At any time, one of your investments may fail.
Okay, but let’s be specific – where to invest your money well?
When looking for a place where you want to invest money, it’s worth paying attention to the following suggestions:
- The stock exchange is a place where virtual transactions are made between buyers and sellers offering shares in joint stock companies. Shares are a type of securities that make the buyer one of the owners of the company and as such, they are traded through a brokerage account. After purchasing the shares, that person can:
- Take part in general meetings and decide on the fate of the company,
- Receive a portion of the company’s profit, defined as a dividend. This amount is allocated to the shareholders once a year,
- Trade in the purchased shares of the company when an interesting opportunity arises.
The method of buying shares is relatively simple. All you have to do is set up a brokerage account, transfer suitable funds, select the shares you are interested in and then make a purchase by setting a price limit and the number of shares. If all this is done properly, we become stock market investors.
- Investment funds are a form of mutual investment of money based on individual or collective placement of funds paid by fund participants. This means that the participants invest their capital in selected assets and predict whether their value will decrease or increase. By investing in funds, investors have the opportunity to invest their savings in more expensive assets. Moreover, their operations are also more flexible as they can buy or sell their investment units at any time. Investment funds can be selected taking into consideration the following:
- The lower the risk, the calmer the investment, i.e. choose long-term and stable investments that have an established position on the market. Shares might be more expensive and the profit takes a long time to materialise, but the investment is relatively safe,
- The greater the risk, the faster the multiplication of capital, i.e. choose new companies with a chance of a rapid increase in the value of their shares. By purchasing shares of a little-known but fast-growing company, an investor has an opportunity for a quick increase of their investment. This, however, entails a much higher risk of the loss of income,
- A diamond house is a place where we can buy diamonds, also investment diamonds. For years, precious stones have been in great demand not only among the fans of shiny trinkets but also among entrepreneurs. This is because this type of investment offers a lot of investment security. Investment diamonds form a small market, which makes them quite resistant to stock market speculation. Their value is stable and depends on market demand. When choosing one of the diamond houses, make sure to remember that:
- Investing in diamonds is a long-term investment that will last at least 3-4 years. By buying and selling a diamond within the course of a month, we can make a loss,
- The fees associated with the investment are considerable, so it is important to look carefully at what each diamond house offers to know what margin they charge and what their level of expertise is,
- It’s worth getting to know the basic diamond assessment guidelines to avoid buying an expensive piece of junk.
- A mint is a place where we can buy gold, silver, platinum and other precious metals. Investing in such assets has a long and rich history, as gold and silver have been used to exchange for goods for many centuries. The value of both assets is relatively steady. There are, however, situations where the price of precious metals can change more dramatically. In the case of gold, these are political and social events in which the state returns to its original forms of property – it rejects the currency and focuses on gold. In the case of silver, there is a growing demand in industry and a decreasing quantity of extracted raw materials.
- Startups are the last investment area which is worth mentioning. A startup is a modern form of investing funds through the provision of financial assistance to young entrepreneurs who are only embarking on their adventure in the world of business. This is quite a risky form of investment, but it can yield a profit in a surprisingly short time.
The investment market is extensive and consists of many areas where we can invest our funds. However, by choosing blindly, we can quickly lose all the savings made on our investments. It is therefore worth looking around carefully and choosing an investment area which we feel comfortable in. Understanding its principles, history and assets, we will know where to invest our money well.