Few Effective Investment StrategiesНачать инвестировать
Today more and more people understand the importance of financial security and try to follow major investment principles, chiefly showing interest in short-term, cash investments and real estate. This article will briefly describe the most effective investment strategies.
Employment of Capital
Direct investment involves gaining an equity interest sufficient for providing control of a company, often a foreign one. Broadly, it includes reinvesting profits, building new facilities, acquisitions and mergers. To receive passive income investors make profits investment and investment of savings into business or investment funds (the last strategy supposes that the employment of capital into securities - equities and bonds – is entrusted to a managing company). Investing of temporarily available funds is a separate issue and includes short-term currency trading or purchase of government bonds.
A venture investment type of funding is considered high-yield but risky. A company uses venture capital to give funding to the startup often in a technology industry) in exchange for equity in the startup. The firm has an investment portfolio owned by a limited partnership, where it is a general partner. Investment of available funds of temporary character as a venture capital is not supposed.
- Stock market trading – purchase/sale of stocks; the income comes as dividends (long-term investment) or stock speculating (high profit/high risk)
- PAMM accounts – a professional manager earns profit for the investor by trading (passive income)
- Binary options – buying and selling assets (currencies, stocks, precious metals, etc.); possible losses and profits are known in advance; requires knowledge and time.
- Forex – currency trading on the foreign exchange market (risky operations, requiring knowledge/analysis/time)
- Online investing into startups or Internet shops – high risk and potentially high profit
- Internet investment into gold (bullions or electronic gold) or precious metals (UMA) – low profit and stability
This approach implies investing funds for several years, at least for more than a year. It provides stable (though not extra-high) income on a long-term basis. This includes reliable assets - government bonds, deposits, securities, stocks, gold, real estate, construction, and so on.
Interest-bearing investment (placing money at interest) may include a bond, a money market fund, a deposit bank account (which is a most common method) – anything that brings regular/periodic interest.
Long-term approach includes one-time deposit and accumulative investment, when regular contributions are made. The second option allows to accumulate greater capital and achieve large-scale goals.
Long-term investment has the following advantages:
- time is an investor’s friend: you can reinvest your dividends to reach greater profit; in several years the investment can double
- you minimize the level of stress, because you don’t have to monitor the situation every day or every hour, and because the risks are lower
- there’re more opportunities to correct mistakes
- you pay less taxes than active/short-term investors do
- the variability of return rates diminishes in longer investment
Short Term Investments
Such investments are intended to be converted into cash within a year (in 3-12 months). They may include:
- purchase of securities to be held in an investment portfolio (speculations): requires experience and knowledge
- Forex currency trading: requires knowledge and experience as well
- PAMM accounts: trading is entrusted by an investor to a professional trader, which allows to receive passive income (but it’s important to find an experienced and successful trader)
These methods imply high risks; diversifying one’s portfolio allows to lower them.
The advantages of the best short term investments are:
- an opportunity to earn higher interest;
- an opportunity to get cash quickly if it’s necessary;
- tangible results encourage the beginner investors for further efforts;
- an opportunity to form substantial capital that can be then invested into long-term projects quickly.
Those who prefer low-risk short term investments may invest into bills and bonds, stocks of stable and growing companies, precious metals, savings accounts in banks or credit unions, certificates of deposit. The main principle is that the investor should have the opportunity and right to quickly liquidate these assets if he/she needs cash.
If you would like to try yourself in investing but don’t know what to start with and aren’t ready do risk large sums, small investments to make money is a good option. For example, if you’re looking where to invest 1000 dollars, you will need a right broker for beginners. One of such brokers is RoboCash – a group of companies, a microfinance organization providing a platform for investment. It offers:
- high annual rate (with reinvestment) - more than 14%
- fully automated service allowing an investor to save time
- no commission or fees
Let’s say, you’re investing 1000 dollars in RoboCash for 6 months at 16% rate. Then in 3 months you will receive about $92 profit; if you make such contributions monthly, the profit sum will be about $6318. If you make one-time investment for a 9-months period at 16%, you will earn $141, or $693 with monthly $1000 contributions. If you select investing $1000 for a year, your profit will be about $193, or $219 with monthly contributions.
It’s easy to start investing with RoboCash. Use the calculator to estimate expected income. The user-friendly interface gives helpful tips at every step.
First you need to register on the website as an investor. Then transfer the sum of money to your investor account. Now you can start forming your portfolio of an investor. Set the parameters of the expected return rate and the size of the portfolio. After that the system will continue to create a portfolio in automatic mode. Finally you can start receiving your monthly income - monthly payments from Robocash borrowers, which include the capital amount and interest payments. The funds received can be reinvested into other loans or transferred to a bank account.
If you still doubt it’s the best way to invest 1000 dollars, just note the fact that Robocash provides 100% money back guarantee - the creditors take all the risks.
A successful investor should know how to evaluate investment efficiency, which is the correlation of the return amount and the investment’s cost (ROI). To calculate it, divide the return (benefit) of an investment by its cost, and express the result as a ratio or a percentage.
When choosing an investment project, make sure that it:
- justifies/compensates the money withdrawn by you as an investor from your current consumption
- covers the risks
- covers inflation losses
An effective investment project must:
- preserve and increase the funds invested into it
- cover all payments related to its implementation timely and fully