Thinking of Investing? Start Here
By Mikkie Mills
Starting a new investment is one of the most suitable avenues to grow your money, if not the only one. It can be exciting and challenging as well. The primary challenge that comes with thinking about investing is the logistics involved - the fear of failing or losing your capital. Such fear should drive you as a prospecting investor to think of ways in which you can make a good investment start. Whereas you may have the capital and goodwill required to make your investment a reality, knowing where to start is the critical part.
The first step to engage in when seeking a new investment is to research far and wide to well-inform yourself with the investment options available in the market. The key concern during your investment research should be where to put your money for optimal gains. With there being numerous investment options in the market, analyzing each of them for their benefits and risks would ensure that you make an informed choice. When doing your research, always have in mind your parameters such as the amount of money you are willing to put in as capital and your availability towards supporting the investment.
One of the suitable investment options that you can pursue is the stock markets. This option is much favorable for persons willing to invest their money in buying a share of another company without overly putting their cash at risk. Stock markets offer a stable income proven to show a steady rise in the long run. Bonds are also a reliable and near-risk-free investment option since the money is lent to the government or reliable corporate entity.
Depending on your capital base, you can also choose to go for unrelated options such as in the real estate industry or starting your own business, provided you are well aware of the market drivers of each.
With these investment options, you should endeavor to learn their dynamics such as factors that drive or affect them. Being naïve in them, relying on existing stock-trading giants such as Options Animal would be the only chance of getting it right.
Choose the right investment option
Juggling between these options should be based on your facts regarding the drivers, risks, and returns of each. Picking the right one would be based on how much money you have with you and how much time you’ve got. For instance, if you have much time, say over 30 years of saving, then the most suitable option that would guarantee returns would be the stocks market. Analysts have advised that although the markets fluctuate often, they show a steady net annual increase in average return of about 10%. When it comes to picking the right stock to invest in, however, index funds are much preferable as they are generally diversified across multiple stocks.
How much to invest
Having known your investment options and chosen the right one based on your income profile, figuring out how much to put in should be your next step of equal importance. It is advisable to choose an amount that doesn’t drain your pockets and savings completely. Budgeting for the investment should leave you with some contingency or emergency fund to ensure that you can achieve self-sustainment such that you would not have to prematurely withdraw your invested funds.
Depending on the investment option chosen and the returns, it is best to go with the minimum investment amount as that gives you some room for error and cushions you against the unprecedented eventuality of losing your money. After making the right investment profile, making a move to actualize your investment plan should now be relatively easy.
In conclusion, besides having the investment capital and the goodwill to invest, the process of making a successful investment should take you some time of researching and making due diligence. The multi-stepped process ensures that your ultimate investment offers you the kind of net returns you yearn for.