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The Best Way to Invest Money

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Are you looking for the best way to invest your money? There are many different types of investments, and there are many factors to consider when deciding where to invest your money. There is no one-size-fits-all approach to investing money. Money managers all around the world agree that to maximize your profits, you must invest in a variety of investment instruments.

The first and most important investment successful people make is when they first plan their finances.  Take time to list out your financial status – revenue, expenditure, loans, etc., then make a list of all financial goals. These goals must subsequently be given priority according to your own choice, position or family aspirations. Once all these are finalised, put together a list of all investments, including non-liquid ones. This will assist you in determining how much of your goals have already been met.

It’s also worth noting that the “BEST” savings and investment strategy is strongly reliant on your financial situation. You will have access to much more attractive and sophisticated products in which you can invest if you’re a High Net Worth Individual (HNWI) than an average person who just have little funds to set aside for investment.

Because every situation is unique, let me begin by saying that there is no such thing as a “best” investment; certain products in certain jurisdictions may appear and may be more appealing than others. People invest in various assets such as equity, commodities, debt, real estate, diamonds, gold, silver, antiques, paintings, forex, derivatives, carbon credits and so on.

That said, you need to assess yourself by first asking some important questions before thinking of any investment – what’s your risk tolerance? What are your financial objectives? How quickly would you like your money back?

Depending upon your risk appetite, here are some best investment choice for you:

Low-risk Investment

You can invest in bank fixed deposits and recurring deposits if you need money for a certain purpose and don’t want to incur the risk of losing it. I’d also recommend a post office savings plan, though that’s a 5years lock-in.
The PPF (Public Provident Fund) is also a great way to invest, but there is still a lock-in time greater than your 3 to 5 years route. Returns are free of taxes of roughly 8-9%.

Debt Mutual Funds are another close to zero risk option, which is mutual funds invested with debt instruments of different companies. These are relatively more secure than equity instruments, but there is always a risk of non-repayment of debt of companies that fall sick.

Medium risk Investment

You can invest it in mutual fund schemes via SIP if you could somehow take some risk with the available cash. Notably, equity-oriented mutual funds in particular will operate better in the long run. Continue to invest in a strong big size and/or mid-cap fund in a disciplined manner for 5 years or more, and you will almost certainly have a sizable percentage of money after your investment time. You have the option of selecting one large-cap equities fund and one balanced fund. This will protect your money from the volatility of the equity market. Maintain a 3-5-year or longer investing plan.

Other options you can consider on this are Dividend-paying stock, Municipal Bonds, Real Estate etc.

High-risk Investment

This depends completely on your willingness to accept large risks; stock is a very good investment choice if you can tolerate the risk involved. You’ll need to learn about stock markets first. High-risk investments are perilous, but at the same time, they may provide a lot of benefits and gives a big return for your money. The stock market allows trading in many assets, each with its own rates of risk and profit. It will be the trader’s job, whether it is dangerous or not, to select the assets when he joins the position.

Some common examples of the best high-risk investment are Hedge Funds, Real Estate Securities, Crowdfunding, stock market etc. You might also regard cryptocurrency as a high-risk investment with a high return. Stocks can produce money in the short term, but they may also be dangerous.

Your risk tolerance should be determined by your financial objectives and your attitude toward the prospect of losing funds. All these must be considered.
Note: A qualified financial adviser or stockbroker should assist you to identify your degree of risk and assist you to select your assets in line with it.

Also, your investment choice can be determined by how soon you want your money back, this could be in a 3 – 6months period, or 1- 5years or better still 5 years and above. It all depends on your targets and the purpose of your investment. There are several investments you can put your money into either in a short term or long term.

Short Term Investment

A short-term investment is an investment that will be held for or below three years, that is between 0 – 3years, then sold and/or converted into cash.

Trading, certificates of deposit, short-term mutual funds, short-term fixed deposits (FDs), and short-term bonds are all examples of short-term investments. Although many people prefer to play the market, it is important to educate yourself and learn a lot before trying a short term investment.

Long-Term Investments

These are for those that may anticipate paying off after several years of owning them. Because you have a longer time frame when investing long-term, you may be more aggressive, thus you may choose to invest in an aggressive mutual fund or equity funds to receive the best rate of return.

Long-term investment may be approached by calculating the yield rate you desire and searching for a mutual fund that averages the yield for five to ten years. Other examples of long-term investments include bonds, gold, equities, property etc.
Keep in mind that the longer you have to invest your money, the greater the risks you may accept. If you will need the money in the next few years, take a more financially cautious strategy and invest in a safer kind of assets.

In addition, you need to diversify your fund. You are investing in a goal, the main means of accomplishing this goal or target is your asset allocation. The distribution of assets should be strategic, whether your aim is possible in the long run or the short term. Also, never let fear and disgust at the present price volatility mislead you and take panic decisions, which you will miss your goals and targets.

A well-diversified portfolio helps you achieve your objectives in the long term and also offers a certain amount of short-term protection. Put the money in a diversified portfolio of top funds in the Large, Mid, Small, and Flexi Cap categories.

Read the books “Fail-Safe Investing, lifelong Financial Safety in 30 Minutes” by Harry Browne and “The Permanent Portfolio” You should read whatever you can get from investing as a potential investor… but start at the start of investment books and websites. Otherwise, you’ll shortly discover that you’re lost.

Finally, consult with a financial advisor. Tell them what you want to achieve and seek their advice. A qualified financial adviser can assist you to decide simply where to put your assets and assist you to prepare for achieving all your financial objectives. Many will even educate you on how to invest along the road if you pay attention to what they’re saying.

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