Where to invest money?
Probably, every reasonable person at some point, wondered: "Where to invest your money?" To profit was higher, but the risks are smaller. Experienced investors will answer that it does not happen. The smaller the risk, the less profit-we have a direct relationship. Also important is the issue of liquidity. Do not worry, it is profitable to invest money not so difficult. Importantly, the desire and the availability of seed capital. The rest will come with experience. Turn to the theory of investing money.
Analysis of the situation
Before you plan where to invest money, the investor must determine the answers to the following questions:
1. what amount I am willing to invest?
2. what are the terms of investment? How long will I get my money back?
3. how much profit I expect to receive?
The iron rule of any investor is to not use borrowed funds. If you firmly believe in the reliability of investments and believe that the expected profit will exceed your cost of getting and paying for a loan-only lend money or take a loan. To further reduce risks, occupy the available amount, not those for closing which will have to sell the apartment.
Once you have decided on the amount and the timing, soberly assessing the situation and outlining the desired profit, go to analysis of investment.
Where to invest-investment analysis
Investing, investing for profit, you need to assess the 3 parameters:
● the liquidity.
If the risk of loss of funds is minimal profitability also tend to be small (e.g., a bank deposit). With the increasing risk (Forex trading) have significant increases in both profits and risks.
Liquidity refers to the ability to quickly enter/withdraw your money. If you purchased your gold coins and want to sell them-need to find a buyer, and come at a price. In other words, the liquidity of the investment medium or long time. If you are trading on Forex, bought 1 Troy ounce of yellow metal, the price increased to $ 2, and you're ready to sell, your query will be executed within seconds. In this case, the broker took over buyer's search feature to your asset. In other words, the liquidity of the Forex is always higher than for other assets.
We used an example with speculation, which is not an investment in a pure form. On the other hand, buying an asset (investing), the investor over time will sell the asset with profit as the difference in cost. That is, in some cases, it is reasonable to consider an investment speculation, stretched in time.
Today, not all traders are speculating on its foundation on Forex. A lot of players in the financial markets, including long-term use Forex trading, which is investing. For example, an investor buys gold, silver or United States dollar, hoping to sell them later (after a week or even a few months). This form of trade, it is important to properly manage the deposit (using the principles of money management), as well as to strictly adhere to the chosen direction (if we buy gold, no sales, even if we believe that you will move down).
If a trader uses short-term fluctuations in assets (currencies), for example, for a couple of hours or days-it's speculation, that is trade.
Diversify your investments
Diversification of investment implies their distribution in places with different profitableness and risk. Irrational invest all funds in one place-right allocation allows you to increase the overall return on investment and reduce the risk of losing money.
For example, an investor wants to invest $ 1000 in the pamm-accounts (trustee management at Forex). The money can be divided into 3 parts (or more, depending on the amount and the investor): 40%, 40% and 20%. The first two parts are put in money managers that use conservative or sredneriskovuû, the remaining 20% are aggressive but risky. If 20% is lost, they are offset by conservative managers. If aggressive trader will show a profit over a period of time, it will increase the average yield of shared attachments.
A good investor always puts its eggs in several baskets.
The Forex market as highly risky investments
The monetary exchange a lot of advantages over other ways of investing money: a good performance (from 3% per month), simplicity attachments (wealth management, an independent trading), a wide range of financial instruments. But the risk of loss of funds is quite high. Trade statistics beginning traders are not happy-after a year of practice afloat remains around 5%.
The conclusion is simple: choose the reliable, proven managers. Look at capital, the trade, and only then on profitability. And then you answer the questions: "where to invest the money?"
Best Forex money management
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