Do you want to become an investor but lack knowledge? You don’t have to get a higher education in finance for this. In order to successfully invest, you need knowledge. But if you do not have a financial and economic education, you can still become an investor. You can fill in the lack of information yourself.
To learn how to invest, you will need to understand the basic principles of the functioning of financial markets, learn how to analyze existing trends and their changes, it is desirable to master the methods of analyzing price charts (technical analysis) and understand the features of various investment instruments. You can master this wisdom on your own by reading a number of books on investing (there are many such books on the Internet and in bookstores), or by completing training in the appropriate courses, the second way is faster.
In addition, you will have to spend several hours weekly analyzing news and charts in order to be able to make adjustments to your investment positions in time. You can contact specialists — the JKR investment fund company will help you to make profitable investments in entertainment. The most affordable way is to invest in: stocks, bonds, shares of investment funds, structured products. There are other options such as investing in real estate or collecting (antiques, paintings, old coins), but this is not for everyone.
There is also an interesting option for investing money in the so-called metal bank accounts, when the deposit is not measured in monetary terms, but in grams of a particular metal, for example, gold, but due to the current steady trend of falling prices for precious metals, this method of investment is not yet should be considered.
First steps in investing: more about securities
There are different variants of securities, that you should know:
- Shares are equity securities. By buying a share, you, in fact, become a co-owner of the company and are entitled to a share of the company’s profits paid in the form of dividends. But the main point of investing in stocks is to profit from changes in market value. Buy cheap and then sell high, or vice versa, first sell high and then buy back cheap — is the main idea.
- Bonds are debt securities. The yield on them will depend on the reliability of the issuing company. If the issuer is reliable (this is determined by the rating), then the yield on bonds is close to the yield on a bank deposit. Bonds with higher yields are associated with high default risks, therefore, to work with them profitably, you need to be experienced enough and be able to assess the prospects of a particular company. This is not suitable for beginners.
- Investment funds are the most common investment tool around the world. It is an easy and affordable way to invest money with the help of professional managers.
- Structured products are complex tools to understand how they work. Their main idea is to protect against possible losses. The structured product consists of two parts, most of which are bonds of reliable companies, which give a guaranteed small income. The smaller part, equal in value to the expected income, is represented by highly profitable, but highly risky market instruments – options. The main advantage of options is that in the worst case, the loss on them cannot exceed their initial value, that is, they are fixed, and the profit can be hundreds of percent.
Each of these tools has advantages and disadvantages. You can only make your choice after assessing your tolerance for losses.