First of all, what do you understand by the word investment?
Investment is what you do with your money or your long-term savings, which will in the future generate lots of profits for you. Investing does not only mean buying of houses or lands and leaving them for a long-time to generate profits. There are also other ways to invest your money and it will yield a good fortune for you.
Investing is not only for those that have a lot of money, anyone who has money can decide what to do and how to invest his or her money. Protecting the value of your money over time against the effect of inflation also increases your value of saving and obtaining greater profit by earning a return more than the inflation, also saving enough money can enable you earn enough money from the investment and be able to achieve your goals.
INVESTING IN STOCKS
Investing does not have to be money, you may decide to buy and sell stocks as one of your investments. Let’s presume you do not know and have not heard about investing in the stock market, you have to work with a stockbroker, now the question is who is a stockbroker?
A broker is an individual who has been trained and has the license to buy and sell stocks, you will be playing safe working with one. Your potential returns on an investment and your potential risk have to be in the balance if you want your investment to provide a possible 20% return. You have to take the risk that your investment may fall 20% in value because the higher your target returns the more risk you have to take.
There are different reasons why one person’s comfort with risks may differ from another, but it will be important for you to understand your attitude toward risk when it comes to investing.
HOW TO INVEST IN STOCKS
Investing in stocks is easier than a beginner might think, all you need is an online brokerage account to start. Investing in stock is buying shares of ownership in a public company. Those small shares are called company shares, you are hoping the company grows and perform well over time.
Your shares may become more valuable and other investors may be willing to buy them from you for more than the amount you bought them, which means you will earn a profit. Investing in the stock market is a game and a good rule of thumb is to have a diverse investment portfolio and stay invested, even when the market has ups and downs.
One of the best ways for a beginner to get started in investing in the stock market is to put money in an online investment account. With many brokerage accounts, you can best start investing for the price of a single share.
STEPS ON HOW TO INVEST
- Decide on how you want to invest in the stock market: choose the option that will be best represented by how you invest and how hands-on you would like to be in choosing the stock you invest in.
- Consider an investing account: For you to invest in stocks, you’ll need an investment account for the hands-on types, this usually means a brokerage account. Then for those who like a little help, both brokers and Robo-advisor allow you to open an account with little money. Opening an online brokerage account offers the quickest and least expensive path to buying stocks, funds, and a variety of other investments.
- Learn the difference between investing in stock and funds: for most people stock market investing means choosing between stock mutual funds or exchange-traded funds and individual stock.
- Stock mutual funds: A standard and poor 500 funds replicate that index by buying the stock of the company in it. When you invest in the fund, you also own a small piece of each of those companies. You can put some capital together to build a diversified portfolio.
- Individual stock: For instance, if you are after a particular company, you can buy a single share or a few shares as a way to dip your finger into the stock-trading waters. If you search for a company and decide to invest in it, think about why you picked that company in the first place.
- Set a budget for your stock market investment: As a new investor, you have two questions to ponder.
How much do you have and need to start investing in stock?
The number of funds you need to buy an individual stock depends on how expensive the stock is depending on the shares. If you want mutual funds and you have a small amount/budget an Extra Traded Fund (ETF) will be your next option.
And how much money you should invest, if you are investing through a fund, you can allocate a large portion of your portfolio towards stock funds especially if you have a long term. Individual stocks are another story, a general thumb is to keep a small portion of your investment portfolio.
- Invest in your long-term goals: Stock market investment has proven as one of the best ways to grow long-term wealth. For long-term investors the stock market is a good investment no matter what is happening day to day and year to year, it is a long-term average they are looking for.
- Manage your stock portfolio: If you follow the steps above to buy a mutual fund and individual stock over time, you will want to revisit your portfolio a few times in a year to ensure it’s still in line with your investment goals.
CRYPTOCURRENCY
Cryptocurrency allows us to buy goods and render services and even trade them for profit. This is a digital asset that can calculate without the need for a central monetary authority such as the government banks.
Cryptocurrencies are created using cryptographic techniques that enable people to buy and sell and trade them securely. Bitcoin is a cryptocurrency and most other cryptocurrencies are supported by a technology known as the blockchain, which maintains a temper resistance record of the transaction and keeps track of who wants.
One of the common ways cryptocurrencies are formed is through a process called mining which is mostly used by bitcoin. Other cryptocurrencies use different methods to create and distribute tokens and many have a lighter environmental impact.
HOW TO BUY CRYPTOCURRENCY
- Decide where to buy it: There are many ways to buy cryptocurrency safely, through the most accessible method for beginners is likely to be a centralized exchange.
- Choose how you will pay: If you are a more experienced investor you may want to trade some of your existing crypto holdings for another type of cryptocurrency e.g., Bitcoin for Ethereum.
- Add value to your account: It depends on how you choose to pay, you may have to fund your account before purchasing, if you are using fiat currency most exchanges allow debit and bank transfers.
- Select a cryptocurrency: There are many options for cryptocurrency investors, before you buy ask yourself what your goals are for this investment, below are the types of cryptocurrencies:
- Nerd wallet: This has created guides to some widely circulated cryptocurrencies including bitcoin and bitcoin alternatives.
- Bitcoin: This is the first and most valuable currency
- Ethereum: This is used to carry out financial transactions more complex than those supported by bitcoin.
- Cardano
- Litecoin
- Solano
- Dogecoin
- Stablecoin
A lot of cryptocurrencies are traded publicly. Cryptocurrencies make financial transactions easier and investing helps secure the future.
