Knowing how and where to invest your money is a task that can give us more than just a headache. We will never be certain about whether the made investment will be beneficial or, if on the contrary, we will suffer losses.
The phrase that everyone who wants to invest in any market should keep in mind at all times is: Do not invest what you are not willing to lose, although it could also combine with … Who does not take a risk does not win.
A balance between these two phrases could be your best weapon when it comes to investing, because if you invest a capital that is needed for your daily life, you will not see the market clearly and will only have a great concern if you lose the investment, therefore you will perform operations based on an emotional criterion and emotions are an enemy of the market.
On the other hand, if you invest money that losing it will not affect your day to day life, there is more room to take risks and be able to obtain a greater benefit.
Why is it important to know where to invest the money?
Knowing where to invest your money or where not to invest it is as important as looking both sides before crossing a street where vehicles are passing or even not getting too close to a cliff. Money is something ephemeral, but with that we pay the mortgage, food, clothing … so making bad investments that can make you lose something that costs us so much to earn … is not a good idea.
A previous investigation about the project in which we want to invest and performing an analysis of the historical data obtained from their quotations must be carried out in all the operations that we want to carry out.
Where can you invest the money?
There are several fields where you can invest your money, some with more or less risk, more or less market volatility or with a fixed benefit with which we will have more control over the profitability that we will obtain.
Before investing your money in one of the different markets it must be clear what we want to obtain, how much we are willing to risk and if we are going to need in the near future the capital that we are going to invest … all of this data can help us to opt for one market or another.
The sale equity market could be defined as the investment in assets that do not ensure the return of the investment made.
The Shares, for example, are variable income assets since, as its own name indicates, the income obtained will be variable both positively and negatively, therefore you can not project certainties in your future quotations, only probabilities of the possible outcomes.
The advantage of this type of market is that if we invest the right way, the return will be higher than in the fixed income markets, but on the contrary, there are also more risks.
Fixed Income Market
Fixed income is fixed-income assets and agreed upon in the acquisition, issued by companies and governments to finance their activities and investors obtain an interest. These assets are represented by securities that the investors can sell to recover their investment.
In this market we can find two options, public fixed income or private fixed income.
Private fixed income
It is issued by companies, an example would be assets of mutual funds with a fixed income, which provide a generally low but constant benefit without taking risks of possible losses, unless the fund is declared bankrupt.
Public fixed income
Generally, it is debt issued by governments. These sovereign bonds have a fixed return at a certain maturity, similarly they have seen states breach their debt obligations by entering into technical bankruptcy.
More and more investors are wishing to enter the cryptocurrency market, as it is a market that in recent times has given great benefits.
That is why the investment in cryptocurrency could be considered high risk if you are not familiar with this market.
This type of investment can be one of the most productive or the most unproductive, due to the low market volume that cause great volatility. It is not difficult to see how a cryptocurrency varies its value 40% or more from one day to the next.
Following the cryptocurrencies, the ICOS or Initial Coin Offerings were born. This market would become something similar to a crowdfounding, where a StartUp that wants to launch a project and, instead of asking investors to contribute money, asks for cryptocurrencies and in exchange give tokens of their project.
This type of investment, like everything that surrounds cryptocurrencies, is a medium to high risk investment, and we have to know very well where it is invested in so it does not surprise us.
The biggest risk in the ICOS are the scams, because of it being a booming market that moves large amounts of money, you run the risk of investing your money in a fake project. Thats why a thorough investigation of the project must be carried out in order to determine its feasibility in the execution of the promised.
What kind of investors exist and why are they characterized?
Depending on the transactions that you want to perform, the time of these operations, the risk you are willing to assume or the profitability you want to obtain with an investment, we can identify 3 types of investors.
Moderate investors are those who are willing to risk an investment but taking certain precautions. The profitability sought by this type of investors is medium – high, but they are in no hurry to get it.
They are a type of investors that make the most risky investments. Their expectations in terms of return on investment are high and seek a return in a short term.
Among the 3 types of investors conservatives are those who least risk their capital. If they make an investment they start with small amounts and the return expectations are low-medium and long term, these investors are more inclined to fixed income markets.
Tips for investing your money safely
When investing in ICOS and Cryptocurrencies, certain precautions must be taken to reduce as much as possible the intrinsic risks to this type of investments.
Investigate the ICO team, read its Whitepaper and see if the project brings something new to the market or improves something existing, observe their social networks to see if they are continuously informing, if they answer questions or solve any problems …
A thorough investigation before investing in an ICO can be the difference between making a profit or investing your money in something that is worthless.
Have you invested or do you plan to invest your money in a stock market? Would you like to tell your experience to help others or want to ask about the article? Leave a comment or send an email to [email protected]