The word investment is quite popular and frequently used in virtually every aspect of society, be it at the micro and macro levels. Meet even a person who has never taken up formal training in the most remote and informal sector of every country and bring the subject of investment on the table and you will hear the views of such a fellow on the subject of investment. This is as a result of the significance attached to the subject. And it is as a result of this that the word investment has taken a privilege status in every educational curriculum beginning from, kindergarten, primary, secondary, high school, university and finally in every segment in the working world. Its importance goes beyond the formal institutional framework to every business sphere, including the banking sector. For instance, every business man has knowledge on what investment is all about whether they have been trained in formal educational institutions or not. Additionally, banks are even more founded on the word investment in their dealings with the public on financial transactions, including the consideration and issuing of loans to its members. That tells us that even the financial institutions we see around are a by-product of investment. This shows that investment is something that should be thoroughly and effectively understood as well as know how it works. If it is not known how it works better and you rush into irrationally, you may instead of maximizing substantial returns on returns through investing, tend to lose a great chunk of your income.
This implies that investment not rational approached could be terrible because there are a lot of bad investments out that if you are not thoroughly schooled on how it works, and you get into it swiftly, you may have a great amount of money loss into thin air and there are many investors languishing out that that fell into that trap. This is very important, especially if you are a beginner or better still a dummy in the business of investing. Just like in economically term, it is often taught that one of the characteristics of an entrepreneur is risk bearing, venturing into investment likewise is risk taking that has to be assessed extensively. By this we mean that, venturing into investment could in some areas of investments slow down the expectation you thought, specifically on the issue of earning your returns on investment but that does not mean that what you invested is at stake. In some other cases, what you expect to earn as returns on investment is completely null and void including what you invested and this is the damaging side of investment. It is within this framework that this article has come to address some of the best ways to embark on investment especially as a beginner or dummy. It gives the best trading platform for beginners in the business of investments.
Every passing day, new dummies or beginners who have never ventured into investment are coming into the hub and it is for this reason why it is very important for you to go through this article to abreast yourself on how to best embark on investment. This article will help you understand how to exploit mediums like; exchange traded funds, exchange traded fund for commodities, exchange traded fund for oil, and gold fund as strategic sectors to invest and earn great profits as a beginner in the world of investment.
A). What is Investing?
Investing is an instrument for establishing wealth, but it is not only for the affluent. Anyone can take on an investing program, and various trends make it easy to start with small amounts of money and add to a portfolio periodically. As a matter of fact, what differentiates investing from the games of chance is that it requires time. That is to say, investing it is not a get-rich-quick now agenda. Therefore, if for any reason someone got you excited and put you on an anxiety mood that investing is an instantaneous venture that once you find a suitable deal to invest in, you’ll start receiving profits immediately, then please know that fellow lied to you. Perhaps the fellow was probably making reference to the vast array of gambling games going on around us. This is very important especially as a dummy or beginner in the domain of investing.
Investing is that act of committing money or capital to an endeavor with the hope of receiving in return an additional profit or income. In other words, investing is the process of releasing out money now to earn more money in the long term. The objective of investing is to release your money to work in one or more categories of investment vehicles in the hopes of increasing your money in the long run. Investing is all about operating like a 360 degree thinker by acting smarter and not harder. Many of us work tediously at our jobs, whether for our own enterprises or working organizations. As such, we work lengthy hours, which goes with much sacrifice and inflates stress. Therefore, taking part of our hard-earned money and investing for our long term needs is an ideal way to make the most of what we labor for. Investing is equally about making priorities for your money. Spending is something very easy to do and offers instant gratification whether the propensity is on new dresses, a holiday to some expensive countryside or spacious dinner in a one in town restaurant. Of course all the above mentioned are wonderful and these make life more wonderful. However, investing requires prioritization of our financial futures over our current desires. This fact is most strategic and it is the best trading platform for beginners and consequently the more reason why you have decided to embark on investing as the best way to prepare for the future.
Investing is a way to lay aside money while you are occupied with life and have that money you have laid aside work for you in such a way that you can absolutely reap the rewards of your labor in the long run. Investing is a means to a prosperous ending.Now that you have a generic knowledge of what investing is and why you should invest, it is time to learn about how investing lets you snatchadvantage of the breakthroughs.
B).Rules for Successful Investing
It is very important to for you to know certain laid down rules of investing before being shown some of the lucrative areas that you can invest in for building profits in the future. The following are the rules of investing that must be observed by every investor anywhere and any time.
i).Saving is a condition to investing
Except you have affluent, open driven relatives, living with respect to your means and saving money are conditions to investing and erecting wealth. This is very important because you can dodge savings and you talk of investing. This explains why investing will hardly work for those that recklessly spend everything the make without saving a dime.
ii). Establishing the three best wealth-building investments
People of all economic extremes deploy their money to increase in ownership assets such as, real estate,stocks and small business where you distributein the success and gain of the assets.
iii). Stay realistic about expected returns
In the future, nine to ten percent per annum is about right for ownership investments such asreal estate and stocks. If you operate a micro enterprise, you can be paid higher profits and even become a multimillionaire, but years and decades of hard work and knowledge are required.
iv). Think the future
Since ownership investments appear riskier or more volatile, you must keep a future perspective whenever you invest in them. Don’t invest your money in such investments except you plan to grasp them for a minimum of at least five years, and most preferably a decade or much longer. In other words, it means investing in geared towards securing a blossoming future and therefore worth venturing.
v). Match the time time to the investment
Selecting good investments for yourself entails matching the time time you have to the riskiness of what area you want to invest. For instance, for money that you expect to use prior to the next year, should focus on genuine investments, such as money market funds. Invest your future money mostly in wealth-establishing investments.
Diversification is a powerful investment concept that enables you to narrow the risk of dealing with more intense investments. Simply put, diversifying simply means that you should hold a certain degree of investments that do not move in tandem in different market milieu. For instance, if you invest worldwide,in stocks, and in the U.S. markets. You can also diversify by investing in real estate.
vii). Look at the big picture first
Having an understanding of your overall financial situation and how wise investments fit within is very important. Before you invest, review your tax situation, debt obligations, tax situation and the ability to fund retirement accounts and insurance coverage.
viii). Ignore the minutiae
You don’t to feel mystified by or feel the need to pursue the short-term gyrations of the money markets. Ultimately, the prices of bonds,stocks, and other financial tools are regulated by demand and supply, influenced by thousands of outside issues that millions of investors’ hopes and fears.
ix). Allocate your assets
How you divvy up your money amidst major investments immensely determines your profits. The younger you are and the more money you aimed for in the future, the greater the percentage you should put together to ownership investments.
x). Do your assignment before you invest
You work tediously for your hard-earned money, and purchasing and selling investments costs you money. Investing is not a domain where acting first and asking questions later works well. Never purchase an investment based on an ads or a salesperson’s solicitation of you.
xi). Focus your eye on taxes
`Take advantage of tax-reduction retirement accounts and understand the consequence of your tax circle when investing outside tax-sheltered retirement accounts. This is very primordial to take into consideration.
xii). Consider the value of your time and your investing skills and expectations
Investing in stocks and other securities through theexchange-traded funds and best mutual funds and is both profitable and time-efficient. Real estate investing and running a small enterprise are the most time-intensive investments.
xiii). Where possible, minimize fees
The more you pay in commissions and management fees on your investments, the better the drag on your profits. And don’t fall short to the thought that “you get what you pay for.”
xiv). Don’t expect to beat the market
If you have the right skills and interest, your strength to do better than the investing averages becomes higher withsmall business and real estate than with stock market investing. The great number of full-time, experienced stock market careers makes it next to impossible for you to select individual stocks that will persistently beat a relevant market average over an extended time time.
xv). Don’t bail when things look contrary
The hardest time, psychologically, to hold on to your investments is when they are dwindling down. Even the best investments go through testing times, which is the worst possible time to sell. Don’t sell when there is a sale going on; if anything, then consider buying more.
xvi). Ignore soothsayers and prognosticators
Anticipating the long run is almost impossible. Select and hold on to good investments for the future. Don’t try to time when to be in or out of a perculiar investment.
xvii). Minimize your trading
The more you trade, the most probably you are to make errors. You also get knock with growth transaction costs and increase taxes (for non-retirement account investments).
xviii). Hire advisors carefully
Before you hire investing help, first train yourself so you can better assess the competence of those you may recruit on a hired basis. Be very sentitive of conflicts of interest when you consider counselors to hire.
xix). You are what you read and listen to
Don’t rob your mind with bad investing philosophies and strategies. The quality of what you read and listen to is far more significant than the quantity. Find out how to assess the quality of what you read and hear. This is very important as an investor. We are living in an informative age where about 95% of all existing human knowledge is in documented sources. Arming the brain is the most powerful weapon. The saying, ‘readers are leaders’ is very paramount. To invest wisely entails you discipline yourself in the domain of reading documents that carry strategic ads on lucrative investing opportunities. There are lots of commercial magazines, newspapers, articles, books and just to sites these fews. A hunt for information in these different sources will usher you to a vast array of investing avenues. Apart from reading, there exists thousands of professional lectures infornation on audio cd’s and dvd’s in big shops that you can buy to acquire sound knowledge that will enable you invest wisely.
xx). Your personal life and health are the highest-return, lowest-risk investments
They are far more significant than the size of your financial possessions. This is because your health is your wealth and therefore you must invest heavily in your health avoiding every form of risk thereof. This is because irrespective of the quantity of investments you make, especially at the detriment of your own health through negligence is a display of stupidity and carelessness. In fact, one of the reasons for which you are getting into investing is because you want to guarantee future returns that could handle any form of emergency most especially in the area of health.
These rules for successful investing should be understood and applied appropriately in order to carryout investing wisely. They are the best trading platform for beginners or dummies as well as to veteran investors as well.
C).Strategic areas to invest for wealth creation
After fully assimilating the rules of investing, another question you have to ask yourself is where I can invest in. Therefore in this part, a few sensitive domains of investing will be exposed. One facet twill is treated here exhaustively. Moreover, it provides best trading platform for beginners.
i). Exchange Traded Funds (ETF)
It is a marketable security that tracks an index, a bonds, commodity, and a basket of assets like an index fund. Unlike mutual funds, it trades like a common stock in the stock exchange market. its experience price shifts throughout the day as they are purchase and sold . ETFs typically have greater daily liquidity and lower fees than mutual fund shares, making them a suitable alternative for each investor. Because it trades like a stock, an ETF does not have its net asset value (NAV) calculated once at the end of each day like a mutual fund. Exchange-traded funds (ETFs) offer investors exposure to a diverse extremes of assets and are presently one of the swiftess growing investment products in the world at large.
This profitable area of investing has got specific sector that ha9ve caught the attention of potential investors. For instance we have exchange traded fund for commodities. It should be underscored that exchange traded fund for commodities is very particularly especially in the agricultural sector. Agriculture being the epicenter of great economies across the globe is attracting investors especially in the developing economies where most investors are investing capitals to make it mechanize. Apart from exchange traded fund for commodities, we also have exchange traded fund for oil. This area is equally atracting investing and is very strategic. Countries like Saudi Arabia, Iraq, Iran, Lybia amd the Arab nations at large are a hub in the exchange traded fund for oil in the world. This is because nations in this part of the world are stupendously rich in oil to the extent where even individuals own oil rigs. Therefore, this area is fertile to give it a thought as an investor. Furthermore we also have gold fund. This is a form of ETS that is very vital for investing. The value of gold must not be over-emphasized. We are gradually witnessing the rise of the cryptocurrencies and there are many persons who are taken the risk investing in it with the speculation that it will gain a prided place in the future. Gold is money and money is gold. Therefore looking for gold investing sector to invest in is very profitable and an added advantage especially if you have a mastery of how the the gold market works. This area of investing has tend several persons millionnaires. As a beginner, think about gold fund. To have a glimpse on how to grow your wealth through snatching the gold fund market, you must dig out sources with ads on when and where such opportunities could be tracked just like exchange traded fund for oil.
D).How do Exchange Traded Funds work?
ETFs are effectively mutual funds that function like stocks. By trading a single ETF share, investors can gain access to a complete index without the burden of investing in each of the constituted securities making ETFs a highly effective investment tool. Unlike stocks, where price discovery is a function of demandand supply throughout the trading day, an exchange traded funds is a constitution of securities whose underlying valuation can be assessed as a result of the portfolio’s fairness. This fairness, coupled with the ETFs creation and redemption process, triggers a constant loop of pricing data that is used to create an arbitrage opportunity for traders should the fund’s price step out of line with its expected underlying net asset value (NAV).As the supply and demand for an ETF fluctuates, authorized market-counterparts swap the basket of underlying securities for shares of the ETF to manage the volume of ETF shares in the market. They provide investors exposure to the performance of a complete index or market segment in a transaction. ETFs can be traded throughout the day in the same manner as a stock.