When people think of investing, they tend to picture the stock market. They imagine powerful stock brokers making strange hand gestures and shouting down telephones. They’re certainly not wrong and the stock exchange is a big part of investment. But, it’s not the only way to invest. There are plenty of others and many that are more suitable to your finances. Investing in a number of different ways is always good practice. The best investors spread their money in a variety of areas in order to safeguard against losses. Today we’ll show you 5 different ways to invest your money.
1. The stock market – We’ll start with the most obvious. The basics of investing in the stock market are simple. You purchase a number of shares in a company. That means you now own part of the company. If the company makes a lot of money, then their value increases. That means the value of your shares increases too. There is plenty of money to be made here by investing in strong, stable, long term companies.
2. Mutual funds – This is a route that is often taken by beginners. You’ll hand your money to an experienced money broker. The broker will then pool that money with others just like you to build a large pot of investment money. They’ll invest this ‘mutual’ pool of money in a variety of different places. Stocks, shares, currency, bonds and property. Mutual funds are a safe, secure way to invest. You get the experience of a professional and your money is spread in a diverse portfolio.
3. Bonds – Bonds provide a very reliable and steady return on investment. It is essentially a loan to the government or a business. You loan them the money and receive a constant stream of interest in return. It’s very low risk, but the returns are lower than the good shares. Many use bonds as a backup in their portfolio.
4. Currency and gold – As you’re already aware, currency rates fluctuate with the market. One day the dollar is up, the next it’s down. The art of currency investing is called forex trading and it’s a very popular world of investing. It involves exchanging large amounts of currency when the exchange rates are just right. It’s considered a fairly risky investment, but the returns are very high when you get it right. Currently exchange rates are hitting record highs and record lows. It’s a good time to capitalise.
5. Property – Finally, there’s the real estate market. This is a highly prized route of investment if you have the initial cash to put down. Getting on the property ladder requires a large lump sum. Once there, you can take advantage of renting it out. You could refurbish the property and flip it for a higher price. Or you can simply play the long game and ride the property market to the top. House prices always increase over time and you’ll cash in at the top.
As you can see, there are many different ways to invest. Each have their own benefits and risks. Choose the method you feel most comfortable with. As seasoned investors, we strongly suggest spreading your investments over a number of options. Stay safe and good luck!