Posted on June 14, 2015
The economy of every state in the world has gone through different changes, and because of this, sometimes our future is insecure. When you think about this, the things are actually simple and everyone can see for himself – people don’t keep the same job for more than 10 or 15 years. Because of this, the pension is not secured anymore.
To be able to secure your future and the pension that you’ll later receive, you need to act as soon as you can, and the only way to do this is through investing.
Here are 4 types of investments that you can choose from, based on your knowledge to deal with them or simply on your wish.
These are also known as fixed-income securities, and the term bond means the securities founded on debt. On short, you will be lending the money that you have available to the government or to a company. In exchange to this, they will agree on giving you an interest on your money, and maybe also pay you or give back the money that you have lent out.
The secret to this is that they are almost without risk, as you do “business” with the government, and not a company. The catch is that the return is also lower than for other securities.
Stocks are also known as equities, and when you buy them, you become a smaller partner in a business, meaning that you own a part of that business. This means also that you will get to vote when the meeting of shareholders takes place and you will receive a part of the profit dedicated to the owners. This profit is also known as dividends.
The catch is that these stocks are more volatile than bonds, as these can fluctuate from day to day. Some stocks pay nothing so you’ll make profit only if the value increases.
The Mutual Funds
This means that bonds and stocks put together into a collection will make a mutual fund. If you buy a mutual fund, you will be adding your money next to the money of other investors. When a mutual fund is set, it is made with a certain strategy, with focus. This means that it can be set for small stocks, large stocks, bonds from companies or governments, bonds and stocks and so on.
For an example see :
The catch of this is that you can invest in this, no matter who you are. For this, you don’t have to have experience, because a professional manager will select the securities for you. This is the best way to invest, especially if you are new to this or you don’t have the time or knowledge to choose a good investment for yourself.
The Alternative Investments
After reading about debt and equity, or bonds and stocks, it’s time to know about something else too. There are also other alternative vehicles, other things to invest into, but these are more complicated and require different strategies of investing.
The alternative investments are FOREX, real estate, options, futures or gold. The thing is that this is only for the most advanced investors, as these require good investment strategies. If you are just starting out, you should stick to stocks and bonds, which are safer and easier.
It is true that these represent wider opportunities to earn money, but these also have a higher risk of loosing your whole budget, because to invest in such a thing you need to have serious knowledge of this market or you need to be a professional investor.
Here was just a short presentation of what you can do with your money to build yourself a secured future, so that you’ll be able to have the same lifestyle over the years.
To know more about what investment means, just give us a call at LO Investors.