An investment is where a person puts money in order for it to bring him a profit. Investments can have different degrees of risk and different returns. The higher the yield, the higher the risk. Cash investments are the safest, but they tend to generate the least income.
Cryptocurrencies are a fairly popular investment option today. This popularity is due to the fact that they are being used by an increasing number of people. In addition, certain conventional currencies are often devalued, which again ensures the influx of people into the world of cryptocurrencies.
Another way to invest money is a term deposit or a deposit. A certain amount of money will be transferred to the bank for a certain period of time at interest. The percentage can vary from 5% to 12%. A lot depends on the reliability of the bank, the term of the deposit and the amount of the deposit. Sometimes the deposit can be replenished, and sometimes it can be withdrawn ahead of schedule without losing the accumulated interest. The absolute advantage of such an investment is the guarantee of a refund of the full amount of money. In addition, all deposits are insured by the state. However, it should be borne in mind that there are currency and inflation risks that can devalue the deposit.
The next option for investing your own funds is government bonds. This is a kind of loan that the government takes from an investor and returns it with interest. Bonds of this kind are considered risk-free, but sometimes a default may occur in the domestic debt market. In this case, depositors are left without funds. In addition, the risk of inflation should also be considered. The undoubted advantage of government bonds is their high level of liquidity.
There are also corporate bonds that are issued by various enterprises. Their profitability is often higher than that of government companies, but they also have more risks. For example, a company may become worthless. In addition, sometimes the liquidity of a bond drops sharply and it becomes very difficult to sell it.
Stocks have a fairly large potential for profitability. However, it should be borne in mind that the stock can not only rise in price, but also fall. It should be borne in mind that you can earn money on shares not only if they grow, but also on the dividends that the company pays. However, you should not buy shares just for the purpose of receiving dividends.
If, when buying shares, an investor has to choose them independently, then when investing money in mutual funds (mutual funds), a professional manager will take care of this. Depositors' money is accumulated in such funds and invested in one or another package of securities. The advantages of mutual funds are wide availability and instant diversification, which reduces the risk of significant loss. In addition, mutual funds have professional money management.
Precious metals are another investment target. As practice shows, sometimes in a few years the price of them can increase several times. Many banks provide the service of opening an impersonal metal account.
And, of course, such an object as real estate cannot be excluded from the investment option. You can rent it out or just make money on the increase in its value.
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