Investing means we invest some money or buy an asset with the intention to obtaining a profit. In investing there is always a risk of loss that may be experienced. An investment that can provide greater profit opportunities usually will be followed with greater risk of loss as well. You should know the benefits that can be obtained along with the risk of possible losses.
In general, investment can be divided into two, real assets and financial assets. Real assets are assets that we owned and have a shape. An example of real assets is the home, land and gold. Meanwhile financial asset is intangible assets, usually just a paper that show ownership proof. Examples of investments in financial asset are savings accounts, deposits, mutual funds, bonds, stocks, gold, property, and others. Now, let’s see what the advantages and disadvantages of each investment type.
Savings
Saving some money in the bank for later use if we need.
Savings Benefits
Can be taken at anytime and no risk.
Loss Savings
Money can be easily reduced, because we can take the money at any time and only give you small interest.
Deposit
Saving money for a certain period, the money can not be taken fro certain period or will get a penalty if taken before deposit end period time.
Deposit Benefits
Very low risk. The interest that can be received is greater than ordinary savings.
Loss of Deposits
Profits or interest earned less when compared with other investment types that deal directly with market risk.
Mutual Funds
Is a place to collect funds collectively. Funds collected and will be managed by the Investment Manager to be invested in other investment types. Profit or loss will be divided equally to the investors. This may be the choice for you who are just starting to invest. Mutual Funds have different risk types depend on what kind of mutual funds type that you choose. The types of mutual funds are fixed income mutual funds, stocks mutual funds, and mixed mutual funds.
Mutual Funds Benefits
No need to have a lot of investment knowledge, because it is managed by the Investment Manager. Because your money is invested in a lot of places, so if there is a loss in one place could be saved by profit taken in somewhere else.
Mutual Fund Losses
For some people, because it does not manage by them self, investor often not satisfied with the results. The advantage is less than stocks and there are costs that investor have to pay for its administrators.
Bond
Bonds are debt letter, is proof that we are providing loans for certain companies or governments. Parties who owe will be paying interest for a specified period. Usually debt repayment period is more than one year. The safest bonds are government bonds.
Bonds Benefit
The interest is higher than deposits.
Bond Losses
Long Duration (> 1 year), so that can not be taken when needed or when you want to invest to another investment type. If the party who owes falls into bankruptcy, means they can not recover their debt and you lost your money forever.
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You’re reading this earlier than I would normally tell it because I have to prepare for my presentation here in Chicago. The actual video won’t be up until later this morning, but go here anyway and check (it may be up)…I’m a huge believer that history repeats itself, and that’s what Gann analysis is all about. I personally use James’ Gann analysis (yes, I’m a subscriber to his service) to give me a high-probability backdrop to my more specific trading setups.
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“Turning volatility into substantial profits.”
That statement is the essence of successful OPTIONS trading. Why options and not all the other trading vehicles? Because “perceived” value… or call it “momentum value”,
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Bryan’s been around for a while, but some of the numbers he’s putting forward are way above the average winnings of other “guru”s… so I’m looking further in to it. Last week, for example Bottarelli Research reports hitting winners of 9 of 11 trades after a week of an even stronger 9 of 10…and included in this winning streak, they are reporting a 322% gain in Netflix calls which contributed to a $15,000 overnight gain. In his presentation, he discusses his “Automatic Money Principles” which he further labels as “5 Secret CBOE Tactics for 7-Digit Returns”. They are…
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2. The ‘Indisputable Evidence’ Play
3. The Always Bullish Guarantee
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In our market scenario, investing in the market requires plenty of risk. But there are actually ample investment options that are less risky and direct you towards earning substantial returns on your investment. Although the Stock Market still requires time to get well from the effects of the economic slowdown, the present fluctuating unstable market provide lots of good opportunities for investment purpose.
One must remember that almost any sort of investment involves a certain percentage of risk based on its type. But you will find four categories of investment that have stable rates together with guaranteed returns as compared to the unstable sections of the Stock Market. They cover bonds, CDs (Certificates of Deposit), saving accounts, money market and mutual funds
Make sure you understand that any kind of investment involving less risk will also result in getting lower returns than live stock. On the contrary, high levels of risk mean potentially higher returns on the investment. When you have complete understanding of the risk associated with your selected stock investment, it will likely be of great help to you so that you can determine which particular assets (e.g., cash, bonds, stocks, real estate, etc.) best suit your investment strategies.
Risk has quite a few definitions. Risk is the variation of return. Additionally , it means the amount of variation in expected return. Risk can be taken as the likelihood of loss. The risk profile of an investor identifies his comfort level with various levels of investment risk. Different profiles fit with different types of investments.
If the investor knows his risk profile, he:
- Knows how he will react to the various risks in the Stock Market;
- Can make his investment or trading style that is best-suited to him;
- Can select the best-suited stock among the vast variety of stocks available in the market; and
- Knows the correct position size for every trade based on his tolerance of risk.
Most of the beginners encounter the problem of determining their tolerance level. Thus, it is rather essential to have an appropriate level of skill and knowledge if you want to select appropriate investment or trading strategies.
The risk tolerance of an investor typically alters after some time. There are particular things that can affect your tolerance level, such as investment goals, age, market knowledge and so on.
Investing in a stock market reveals a lot of questions, uncertainties and anxieties developing in the mind of an investor. But when you have good understanding of your risk profile, you are likely to get long term success in future.
There is a proven safe way of investment. That is, spreading your investment among various industries. It is always considered unsafe to invest all of your funds into a single investment. Therefore, invest in different sectors, such as term deposits, shares and property, international markets investment and much more. This will surely lower your risk factor to a great extent.
Sarah Jesica, the Founder and Chief Master Trader of learnforexsecrettrading.com, has actively learn forex trading for over 15 years. He has coached hundreds of Forex Newbies and Advanced Traders to learn forex trading strategies, most of whom, in turn, have become part of the Successful forex secret trading Community.
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