Investing your money is always better than letting it lie idle. There are many ways to multiply your money and make it work for you without too much effort. But unless you’re a financial expert, you should give this whole idea some thought before giving it a try. When it comes to investing you can’t rely on your gut or educated guesses unless you want to gamble with your money. Here are a few tips that will show you the ropes and give you the idea about what to invest in.
Start with the basics
Before you put a single dollar into an investment fund or stocks, make sure to educate yourself about the market you’re interested in and its dynamics. This doesn’t imply just reading about the subject, because there are numerous platforms with test accounts which allow you to practice. It’s like a flight simulator or a virtual football manager game because you can try your hand at investing without putting your savings at risk. After this first stage, you can use a small, fixed amount of real money to see whether you grasp the point.
Take turnaround time into consideration
One of the most important factors for making a decision about what to invest in is turnaround time. First of all, it’s vital to establish how quickly you want your money back. For example, in case that you’re considering investing in a retirement fund, we’re talking about 20 or 30 years. Similarly, purchasing a building and renting out the apartments qualifies as a long-term investment. On the other hand, if you don’t want to wait for so long, you can purchase a dilapidated house, renovate it, and sell it as this method will ensure quick turnaround time.
Forex stands for the foreign exchange market and it revolves around buying and selling various currencies. It’s comparatively easy to understand how this market operates because there are several currency pairs that you need to focus on. Many traders are attracted to Forex because they can take advantage of the leverage and earn significantly more money, but this also includes a greater risk of losing large sums of money. If you want to play it safe, it’s always best to hire a reliable forex broker and let them do everything for you. Investing comes with a fair share of risk, and if you don’t have money to waste, these experts can either advise you on how to invest wisely or take full management of your investments.
Cryptocurrencies are all the rage at the moment. On one hand, Bitcoin, Ethereum, or Dash are blazing a trail in the field of the financial technology, and Bitcoin’s whopping surge in value in 2017, made some investors millionaires. However, it has since then plunged by more than 50%, but it still holds up. Investing in cryptocurrencies can be very lucrative, but you need to be even more careful than with regular stocks and shares, because bear in mind that this virtual money isn’t backed by hard assets, and governments aren’t actually big on crypto because they can’t control it. As a result, the crypto market tends to be volatile and you should carefully analyze and research before jumping on that bandwagon.
Trade the S&P 500 Index
This abbreviation stands for the Standard & Poor’s 500 Index, and it’s actually a list of top 500 stocks in the U.S. which is usually taken as an indicator of the state of the American economy. Even though it’s believed that this way of trading is simpler than other markets, it’s still not for newbies. The S&P 500 Index reached its peak in 2017 when it was up 20%, and yet many investors earned only 10% on their investment money. The reason for this discrepancy lies in the fact that they failed to make the most of the moment because they took advice from the media, listened to their friends, or followed the tips from the internet. This example illustrates why you should leave all this to professionals, at least until you level up your knowledge.
The bottom line is that whatever you choose to invest in, you need to dive into the topic and try to learn as much as possible about that particular market because there’s no shortcut to success.