Where to invest money in 2020 in order to make a profit? This question is as relevant as ever, especially at the end of 2019.
In the CIS countries, having a deposit account with a bank is the easiest way to invest. That being said, the economic downfalls that have happened in recent years and dozens of domestic banks going bankrupt prompt us to search for alternative ways to increase funds.
Against this backdrop, investing in the assets of the financial markets and trust management have been gaining ground. Continue reading our article to learn about the latest investment options.
Any investment activity goes hand in hand with the risk. So, learning how to invest is ultimately the very first thing you should spend your time and money on.
«For the best return on your money, pour your purse into your head».
Without acquiring financial literacy, it is impossible to manage money profitably.
The first aspect one should focus on is making an unbiased assessment of the asset and choosing an instrument that is in line with investor’s personal objectives.
The second aspect lies in the correct risk calculation and the ability to manage it. By placing money into a bank account for safekeeping, the investor risks losing it if the bank suddenly crashes. However, thanks to the deposit insurance fund, the investor can get a certain amount of money back. Accordingly, the investor’s risk will amount to the difference between the deposit and the sum paid by the insurance fund.
When investing in any business, the investor risks losing all of his or her money, and oftentimes doesn’t have a chance to manage this risk. The same is true for investing in real estate.
The third aspect is the expected rate of return. You should keep in mind that the higher the return, the bigger the risk. So, it makes sense to pick those assets that are in line with your objectives. If you intend to save money, you should opt for conservative investing strategies where risks are minimal. However, the downside of this approach is that the return won’t be high either. If you wish to make as much money as possible, you need to be mentally prepared for bigger risks.
As far as the profit margin goes, financial markets are believed to be the most profitable. Their key advantage - unlike the deposits - is that you can personally manage and limit the risks. There is a great variety of investment options available in this field. So, you will have a lot to choose from in terms of what to invest in in 2020.
Securities are deemed to be the most conservative and easy-to-understand investment instruments in the financial market. These can be both government bonds and company stocks. The most popular investment strategies are the buy-and-hold strategy and formation of investment portfolios.
In the first instance, the stocks are acquired, and as their price goes up, so does the investment. If dividends are paid out per share as well, these securities become even more alluring. E.g. between January and November 2019, Facebook shares jumped by 56 %. Such a growth in investment could have been achieved if they had been purchased in January.
When building investment portfolios, the stocks of several companies are purchased, while portfolio risks can be mitigated through hedging. The strategy allows reducing the risks up to 5–10 % per portfolio, and in the majority of cases it is characterized by not very high rate of return.
The second most popular investment method is investing in cryptocurrency. Back in 2017, bitcoin grew twentyfold creating a major uproar. That being said, the situation in the market of virtual currencies has changed a lot since 2017. Bitcoin price plummeted from $20,000 to $3,000, then went back up to $13,000, smashed below $7,000, and continues to fluctuate dramatically.
Even though some experts are expecting another wave in the cryptocurrency market growth, according to the buy-and-hold strategy this investment method is associated with high risks and works best for big capital and aggressive investors.
The third profitable way to invest in financial markets is to transfer funds into a trust management. What this means is that the investor finds a trader (manager) whom the investment assets shall be transferred to for further management.
The rate of return and maximum risk depend on the trading strategy used by the trader and must be discussed with the manager beforehand. One such investment option is TIMA account. Its key advantages include transparency, extensive selection of managers and technical simplicity.
With TIMA account trust management service brought to you by Gerchik & Co, the investor can personally pick a manager by evaluating his/her ranking, rate of return and profit distribution terms, and then invest money in chosen account by accepting the relevant offer.
As opposed to personal purchase of stocks or cryptocurrency, this investment method has more advantages.
On top of that, you can undergo an investment training at Gerchik & Co in order to expand your knowledge and enhance capabilities. By investing in yourself wisely, you will protect your capital against risks and will be able to personally choose what to invest in in order to make a solid profit.
When investing the capital, make sure to carefully read the manager’s offer. If you don’t agree with certain terms described therein, choose a different TIMA account.