Investing money in the right place which would give good returns is what everybody is looking for. For a First-time investor would look a little complicated. It would take some time to actually understand the different types of investments and the perfect one for you. It requires a little bit of experience also.
For a beginner investing in any kind of investment, he should first think about the amount to invest. Whether he has sufficient funds to invest and how much of his savings does he wants to invest. It is advisable to take the help of an experienced person for a beginner investing in funds. They will guide you on what to do and what not to do.
A portfolio should be made by the beginner investing in any place. Investments can be made in various places. It can be shares, bonds, fixed deposits, insurance, debentures, derivatives, etc. You have to choose where you would want to invest. The portfolio should consist of a variety of these investments. This would bring about the best investment. The portfolio can also be of various industries. This would ensure that the risk is minimized.
If a first-time investor in stocks has the funds then today the market is very easy. There are various sites that are associated with the bank account. You will have to create an online trading account in order to trade with the stocks. Once this is done the agents guide you thoroughly as to how to trade and what needs to be done. Your bank account should have enough funds to support your trade. Beginners investing in mutual funds are also a good option. The risk factor is there but all the trade is done by the mutual fund company itself. So for beginners, it is ideal.
For a beginner investing in fixed deposits is the easiest and best way of investment. This can be done with the bank itself. You keep a particular amount in the bank for a fixed period. You will get interested in the amount after the maturity of the period. You can also withdraw the interest amount if needed. This would depend on the policy of the bank. There is no risk involved here and is very good for beginners.
It is advisable for the first-time investor to plan their investment well. Make a good portfolio and see that the amount is equally divided into the portfolio. This would ensure that you get good returns in the long run.
Investing in the modern-day world can be mind-boggling to the average Joe investor. With a wide array of investment choices and the terminology used in them, one would actually have to be well versed to wade through the choices to arrive at the right decision. We shall deal with the most common investment choices around the world.
Banks: Banks used to be the investment institution of choice for many years, even centuries. The term “you can bank on it” is a testimony to the fact that investment in banks is the least risky of all the investment options. The money does increase and the compounding effect ensures that the interest is also paid interest. But, with other investment avenues opening up the interest rates offered by banks seem measly in comparison, even for fixed deposit funds for over a 5 year period.
Stock Market: The next most popular form of investment is the stock market option where investors put their money in shares of one or several companies to maximize profits. Stocks are the barometer of an economy and an increase in the stock market value almost always means profits for the stakeholders of the company. The most common example quoted is that if someone had invested $1000 dollars in GE when it debuted, that person would now be a multi-millionaire due to the ever-increasing prices of stocks of such “blue chip” companies.
The owners of stocks can also benefit from the dividends of the company and feel like they own the company. However, such an investment is also the riskiest of the several options, since markets may rise and markets may fall at any time. Moreover, the person may not always pick the right stocks and end up with losers even in times of a bullish economy. In times of crisis, stocks can fall and can hurt everyone. The Great Depression of 1929 is an example that illustrates what happens when stocks fall leading to panic and a global economic downturn.
Mutual Funds: To reduce such high risk and high gain strategy, many have increasingly turned to mutual funds. This investment option ensures that instead of blindly gambling on some company of their choice, the investor can put his money with a fund that manages the cash on behalf of their clients.