There’s an incredibly large number of resources talking about investing available on the Internet. This can make things a little difficult for newcomers since things can get a little overwhelming real fast.
Investments to consider
Let’s make things a little simpler by going through your options and taking a look at some of the best investments that anyone can make.
Passive real estate investing are well known for the fact that it will (almost) always be in demand. The thinking is that everyone needs somewhere to live so the return on your investment is only a matter of time.
The common way people invest in real estate is by purchasing properties to be sold at a later time. Some people will even invest more to develop the property first so that they can make a bigger profit in the end.
An alternative, if that isn’t to your liking, is to invest money through real estate investment trusts or REITs. These trusts are operated by companies running income-generating properties like office spaces and hotels. Investors are then paid a dividend over time. This shouldn’t be confused with real estate crowdfunding where the pooled investor money is used for investing in real estate projects.
Gold and oil are seen as assets that can grow in value over time. Investments like these are often found through ETFs or exchange-traded funds. These are similar to traditional stocks in that you can buy them off the stock exchange but are actually a collection of assets, kind of like a fruit basket.
Popular examples of ETFs for oil would be iPath Pure Beta Crude Oil ETN (OIL), United States Oil Fund LP (USO), and the United States Brent Oil Fund (BNO). For gold, you can look at GraniteShares Gold Trust (BAR), Physical Gold Shares ETF (SGOL), and SPDR Gold MiniShares Trust (GLDM).
The most popular and common means of investing traditionally, stocks are representative of the shares you hold in a company. Each company will have a different number of available shares, the value of which will depend on the success of the company.
The way this works is that you invest your money into that company, with the returns on your investment paid out in dividends. Your dividend will correspond to the number of shares that you currently hold.
Considered to be a safer investment, bonds are essentially loans with interest with the lender being the investor. Here, the bond issuer (e.g. Government institutions, agencies, or a company) will issue bonds to investors.
These bonds come with a maturity date, the date when the principal amount (the “loaned” money) is to be returned with a predetermined interest rate.
Nowadays, more investors are finding that cryptocurrencies are a great alternative to traditional assets.
A growing industry, the crypto market is an open opportunity for investors. Bitcoin, for one, is becoming ever more popular thanks to the fact that people are finding more ways to utilize the currency and easily convert Bitcoin to cash.
Since most cryptocurrencies are decentralized, access to the market is much easier, and buying the actual currency is straightforward. For example, buying Bitcoin with credit cards safely is a perfectly common practice and can be done anytime you want to.
What also helps is the fact that getting started with crypto doesn’t need a big capital investment as traditional investments. In fact, people have gotten away with using small portions of their salary to buy their first cryptocurrencies. Paxful, for example, let’s users trade with as little as $10 USD.
What to do with your investments
Now that we have a better understanding of the different assets we can invest in, let’s take a look at what you can do to build your investment portfolio.
Approaches to building an investment portfolio
With investments, you’re looking for something that can yield you profits over time, albeit with some risk. The potential profits and risks you face are dependent on the approach you take.
Aggressive investment portfolios
Aggressive portfolios will have a high-risk, high-reward approach to investing. Generally, these types of investment portfolios will be filled with investments that all have a high potential for earning you money while also exposing you to a lot of risks.
Conservative investment portfolios
A conservative portfolio will be the total opposite. This means that potential investors will need to wait for quite a while before seeing returns on their initial investment. These portfolios will normally be used by people with long-term investments.
Balanced investment portfolios
A balanced portfolio will try to take advantage of the benefits of the two prior models. These portfolios will have an equal share of long-term, low-risk and short-term, high-risk investments.
Investing in your future
The whole point of investing is to make sure that your investments make you more money than you put in. This can be scary for some people but we’re here to tell you that it’s all about using what you have and using it wisely. It’s a job in itself, but with the right research, you’re sure to be able to make confident and decisive investments.