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Investing is a great way to become involved in the stock market and make a profit. It is a good idea for anyone, but a bad idea for those who don’t know what they are doing. Before you invest one cent of your hard-earned money, read this article first.
Keep in mind that investing in any type of security involves some risk. You could lose all of your money if the investment goes sour. Never invest more money than you are willing to lose. Do your homework and consult a financial advisor like Fundamental Global Investors if you have any questions.
1) Mutual funds
Mutual funds have been around since the 1940s and have been going strong ever since. The average fund will give you about 9% returns in the long term (roughly ten years or so). The average percentage in a single year is about 20%, an obvious example that investing in mutual funds has proven itself time and time again. It can be done by any income bracket; there are no restrictions on it whatsoever. The only downside is that you need to have thousands of dollars to start investing.
2) Bonds
A bond is a security that represents debt. When you buy a bond, the issuer is promising to pay you back in the specific time period with interest. For example, if you buy 100$ worth of treasury notes from the US government for ten years, when they are ready to be repaid in full with interest on them, you will get 130$. Bond investors make money by buying securities at prices below par and selling above par after getting coupon payments along the way.
3) Stocks
You are an owner of every stock ever issued by any company in existence today or in history. You own shares that entitle you to vote on certain decisions made by management (structure varies from country to country and even within certain countries). As a shareholder, you are entitled to your share of the profits in some form or another (dividends), and you can sell whenever you like.
4) Real Estate
Real estate is an investment that you can touch and feel. It is a physical asset that you can live in, work in, or rent out to others. It has been around for centuries and will continue to be around long after stocks and bonds have disappeared.
5) Commodities
A commodity is a raw material from the earth. Things like oil, gold, cotton, orange juice, etc., have been traded for centuries and will be around for a long time to come. Commodities are physical things that you can touch and feel, just like real estate.
6) Collectibles
This covers everything from artwork and paintings, coins and stamps, cars, and vintage wine bottles. People buy these items because they believe that either their value will go up or because of non-economic factors such as the pleasure of ownership (love of the painting), appreciation for history (historical value), and so on.
There You Have It!
No one investment is the best for everyone. You need to look at your own personal situation and find the best investment opportunity that will work for you. With a little bit of research, you can find the right investment for yourself and start making money today!
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