An investment is defined as the action of investing money for profit. It goes without saying that sticking your money under the mattress won’t do you any favors. For one thing, if the house burns down, it’s gone, and for another, your money won’t grow in value. Thankfully, most people recognize the value of investing their money.
Traditional savings accounts and pension plans are sensible investment instruments but don’t expect to earn a ton of money in a short time. If you want to make your savings work a bit harder, here are some interesting ideas.
When you invest in equities, you are buying a stake in a business. Essentially, you become a shareholder in that business. If you own a significant share of the business, might have voting rights, but even relatively small stakes usually earn dividends when the business is successful.
Equities are potentially very profitable, but only if you choose the right business.
People have invested in precious metals for millennia. Gold and silver are both beautiful and useful. When the financial markets are in turmoil, gold and silver are often viewed as ‘safe’ investment options because they are not subject to the same market forces as stocks and shares. Precious metals also have inherent physical value and can be stored in a physical location.
Whilst precious metals such as gold do gain value over time, prices can be volatile in the short-term.
Forex trading is popular with people who want to make money quickly. The foreign exchange markets are open 24/7, so there is always an opportunity to trade. Forex traders bet on the price of one currency against another. Popular currency pairs include GBP/USD and EUR/USD, but there are many others. You can even speculate on the price of cryptocurrencies if you wish.
Thanks to high leverage, forex trading can be highly profitable, but the potential for incurring a huge loss is high. Learn the ropes via a demo account before you risk your savings in the forex market.
Futures contracts enable investors to profit from short-term price movements in the financial markets, without actually owning the underlying asset. You can buy a futures contract on many things, from physical commodities such as oil and gas to stocks and shares. Futures are not as restricted than the stock market and you need less trading capital to get started.
It’s possible to make large gains in futures contracts, but they are classed as a high-risk investment vehicle.
Don’t underestimate the value of property investment. Generally speaking, the value of the property market is almost always on an upward trajectory, so if you buy a property, you can expect it to make a capital gain in time. You can also enjoy a steady income from property investment, by letting it out to tenants.
Property is a relatively safe investment, but it’s illiquid and there are usually ongoing costs.
Other alternative investments worth considering include fine art and other collectibles, funds and trusts, IPOs, and ETFs. Choose wisely and always maintain a diversified portfolio to spread your risk.