Investing – Choosing the Right Investment Strategies For Your Wealth
To define investment is not an easy task. To invest simply means to put money into an investment with the hope of either a direct benefit/ Return on your initial investment or an expected increase in the worth of the investment over a definite period of time. In order to give an exact example let us take the stock market as an example. Investment basically means putting your money in a bank to keep it in that bank and earn a return on it. An investment consists of many different assets and liabilities.
The most commonly known type of investment is buying shares on the stock exchange market. You can buy shares at fairly reasonable prices and wait for years to make a profit because of a rising value of the stock exchange. The downside of this type of investment is you are usually gambling on whether the asset will rise or not. This is a lot like putting your money in a risk capital reserve and hoping that it keeps increasing in value. With some investments you lose money and with others, you gain money.
Other common types of investments include bonds, mutual funds, real estate and the stock market. All of these can be excellent long-term investments but please note that you may loose your money if you become illiquid. Illiquid investments include bonds that are held by a few select investors out of the total pool of bondholders and vice versa real estate investing involves buying residential properties and holding them for a length of time for a profit then selling them when the property is worth more than you originally paid for it. Please note that you need to follow the law when investing in these types of real estate properties.
An important aspect to remember about investing is that you will only receive returns after the investment period or your return. In order to maximize your returns you must learn about risk factors as well as returns. For example if you want to earn an eight percent return on your investment you would need to have your money invested for a minimum of eight years. A good rule of thumb is never to start your investing with any money that you can’t keep liquid. Two other tips you can use is never invest with money that you can’t afford to lose and never borrow more than one hundred dollars at a time. Remember that with any investment there is always a risk.
One popular type of investment that many people enjoy making is buying penny stocks. Penny shares are inexpensive and are traded on major exchanges such as Nasdaq and NYSE. These investments involve much lower risk than other investments because penny shares do not trade on traditional exchanges. For this reason it is very easy to buy shares of companies at a low price and turn around and sell them for a large profit. However there are also risks with these kinds of investments, such as the stock market going down and you lose everything you invested.
When it comes to the Internet, you will find that many investors like to make short term investments. This is where you get high returns in a short amount of time, and often with no or little risk. The two types of short term investments that most people enjoy are penny stocks and day trading. Both of these options have been proven to be very successful for many long term investors.