Portfolio investment pros and cons. Advantages and disadvantages of different types of investment - the pros and cons of investing money. Cons of foreign investing

Hello everyone! It took me a little over 25 hours to write the "skeleton" of this article. Honestly, I wrote voraciously in two steps, and when the volume of material began to go off scale for 25 thousand characters, I got the idea to break this long post into several parts. Today you have the first introductory part.

Why so much?

In general, Asset Allocation portfolio investment is such a large topic that you can devote a separate blog to it and fill it with thematic articles indefinitely. The purpose of my article today is to quickly introduce you to the course and, using the example of your investment portfolio, show what it is and how it works.

One day in 1986, Gary Brinson, Randolph Hood, and Gilbert Biebauer decided to conduct a study on the example of large pension funds and find out what most affects investment success: why do some people earn millions in investments, while others lose everything? What is the secret: in the correct choice of securities and, in the exact time of entry and exit from the position, in money management, or maybe just luck? The answer to this question opens your eyes to the mysterious world of the stock market and it is right in front of you:

What does it mean? The end result is 94% dependent on the asset selection strategy, 4% on the choice of certain securities, and the timing of entry and exit from a position gives only 2% of the exhaust. The result is impressive! Now let's look at what an “asset selection strategy” is.

What is Asset Allocation?

Asset Allocation (literally from the English. "Asset allocation") is a Western progressive approach to creating investment portfolios, which involves a choice between different asset classes in order to find the optimal balance point between profit and risk with a predetermined investment horizon, risk or other preferences investor.

Please pay Special attention that the choice is not between some individual securities (Gazprom, Lukoil, Microsoft), but between asset classes: stocks, bonds, commodity assets, precious metals (by the way, they are not included in the classic Asset Allocation), real estate, etc.

I think many of you have heard of how largest investors the world, incl. and Buffett advise inexperienced investors to simply invest in. Why do you think?

In this example, you can see an effective portfolio, which, with a composition of 80/20, shows a higher yield and less risk than with a 100% investment in bonds. How is this possible? Why does a portfolio with the addition of a riskier asset class become even more conservative than bonds?

This shape of a convex curve of course does not appear by itself. The trick lies in the regular portfolio rebalancing proposed by Markowitz and the low correlation of these two assets.

By rebalancing here we mean the alignment of the portfolio structure based on the results of a certain period of time. Usually the portfolio is recommended to be rebalanced every six months or a year. Like this? Let's take an example.

At the beginning of the year, we had a portfolio of stocks and bonds, each 50%. A year has passed, during which time one asset has grown, while another has fallen. The structure of our portfolio has changed. Our task with you is to bring it to the initial ratio. To do this, you need to sell the grown asset and buy the fallen one.

At first glance, it is crazy to sell a growing asset and buy one that is unprofitable. And so the absolute majority of investors thinks. This is why they are constantly losing money in the stock market.

The point is that past results are never repeated. And if this year the shares have grown, it does not mean at all that they will grow in the next. Do not agree? Here's an example of a table. How often does the best asset of the current year remain the best in the next?

As you can see, growth leaders and outsiders are different almost every year. That is why rebalancing plays into our hands. At the end of the year, we sell an increased asset and buy a fallen one. Thus, we sell at the high and buy at the bottom. Isn't this the main rule of any speculator? Only, unlike a speculator, who always has the temptation to sit in a growing asset and not buy falling assets, we will do exactly the opposite.

This approach is now called modern portfolio theory. This is the # 1 approach in the west, and it is with his help that overseas resorts are full of happy European-American retirees living to the fullest.

By the way, one more detail. Such portfolios sometimes even allow you to outperform the indices in the long run!

However, there is also a traditional fly in this ointment. Unfortunately (and maybe fortunately), modern portfolio theory is not a science, but rather an art, since there are no rigid formulas for creating ideal portfolios. This is something of a recipe, deviations from which are appropriate and in some cases lead to impressive results.

It's another matter whether you want to set up such experiments with your own future, or would you rather stick to the instructions and reach the planned result?

And one moment. As I said above, there is no perfect portfolio. As good as it is, at times it will lose to indices, individual assets, or even all together. Pay attention to the graphs of the model portfolios - from the very start, all 3 portfolios (aggressive) have been losing to their SP500 benchmark for almost 10 years in a row.

This is a fact that you will have to come to terms with from the very beginning.

Your portfolio will definitely not be the most profitable or the least risky, even over a very long period of time. But it will be optimal for you.

A briefcase is like a tailored suit - ideal only for the person for whom it is designed. The main thing is to remember this and resist the temptation to change its structure due to market events. But we'll talk more about this in the next articles of this series.

Why passive?

Because it takes 10 minutes a year to maintain such a portfolio, and even special knowledge in the stock market is not required at all. It will be enough to follow the plan purely mechanically and you will come to your result. Agree - the idea of ​​spending a minimum of time and getting a result that is better than that of the overwhelming majority of investors is a tempting idea.

What do you need to prepare before creating such a portfolio?

To increase your chances of success and to follow your plan smoothly, it is important to invest fully. And for this you need to do your "homework".

And the first thing you should have is. Usually this is savings that will allow you to stay afloat for six months without any source of income. I've written about this before. This is very important step, without it you shouldn't even think about creating a portfolio!

Imagine that all your money is in a portfolio, and something happened in your life that urgently requires financial investments: Let's say you got sick or lost your job.

The market may be in decline at the moment, and you urgently need money. As a result, you will sell part of your assets at the bottom and fix a loss now, plus you will lose huge amounts in the future when the market will inevitably recover.

Remember - the investment portfolio should never be touched. It is created with one single purpose and, except for this purpose, it cannot be touched.

If you have a reserve - in six months you will probably find a way out of the current difficult financial situation and the investment portfolio will remain intact, and the current drawdown will close with huge profits that you would not have received.

What if there are loans?

One more point: what to do if you have unsecured loans: mortgage, auto or education?

If you have free money left, there are two options for the development of events: direct this amount to early repayment or start running an investment portfolio in parallel.

From a psychological point of view, many would choose early repayment, but from a practical point of view, it is often much more profitable to start managing a portfolio. Depending on the amount you have at your disposal, the difference in choosing between these options can be hundreds of thousands of dollars over long distances. Yes, tens and hundreds of thousands!

All other things being equal, it is always more profitable to start investing earlier. We will talk about this further in the article.

Start now or dig first?

Perhaps the most main question that we are concerned about is how to put together a truly huge capital, and preferably without risk and with minimal investment.

Reasonable people think that this is impossible, but they are only partly right. Investing is where time works for you (or against you, if you have been for many years). And the main miracle tool in this venture is compound interest and its magic. Trust me, it really is magic.

The main factors that affect the rate of capital growth:

1. Your age. The sooner you start investing, the higher the level you will reach. The start time is perhaps the most important thing. Starting early with a modest amount, over time, you can easily overtake those who started later, but immediately invested a solid capital. And I'm not kidding!
2. Your current capital. Here I think everything is clear - the more the initial investment, the more will be the amounts that you will earn
3. Regularity of investments. In fact, this is perhaps the second most important factor after age. The regularity of investments works wonders. Regularly (once a year or once half a year), replenishing your portfolio with even tiny amounts, you can easily overtake those who started before you, even with much larger amount, but at the same time nothing adds to the piggy bank.

Now imagine what happens if you combine all 3 components of success. Your capital growth will become truly exponential.

On this pleasant note, I will end. In the next part of the series, I will tell and show what my personal portfolio will look like.

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Hello! Today we'll talk about investments. Since childhood, all of us have been taught that in order to constantly go to work, give it our physical and mental strength. Unfortunately, this particular model of behavior is the most common, typical among people.

But human ability to work also has a limit. Besides, why does a person need money if he simply does not have time to spend it? He's always at work. It is precisely in this case, when there is money, but there is nowhere to spend it, or when it is necessary to increase it, investments come to the rescue.

What is investment

Investments Is an attachment Money to various financial instruments for the purpose of making a profit.

Let's look at examples of what an investment is, what is the essence of an investment:

Example 1: Let's say you bought a laying hen and then sell it for about the same price and get paid for it. Investment is it? Not yet.

Example 2: If you have waited some time until the price of the chicken rises, and sold it at a new, higher price, made a profit, then this is already an investment in some way.

Example 3:V We waited for the hen to lay the eggs, and you start selling not the hen, but the eggs themselves. You sell them, you sell them, and at some point, the income received from the sale of eggs begins to exceed the costs that you incurred to buy a chicken. You start making a profit: the hen lays eggs, you sell them, you get money. The chicken lays eggs again, you sell them, you make a profit again. This is an investment in its purest form.

Example 4: You bought a chicken, she laid eggs for you, you sold them, you bought a chicken again. Already 2 chickens lay eggs for you, which you can sell and receive money. Or you can buy more and more chickens, they will lay more eggs, and the money you earn will be enough for you to fulfill your needs and desires, to live securely, only by controlling the process of purchasing chickens, selling eggs and making a profit.

In the examples considered, a chicken is understood as a source of income, that is, an asset, and eggs are a cash income that an asset generates. All chickens taken together are capital, or an investment portfolio.

Investing assumes you are investing available funds in any asset, and this asset over time brings you a one-time or systematic profit.

The first steps

Investing just like that, without basic knowledge, is not worth it. Investing just because "A friend invests money in the same place, he calls me with him" or because "On TV, they showed and told how profitable it is, and the TV will not deceive!" will not lead to anything good.

In order to figure out how to invest correctly, let's figure out what kind of free funds you can invest, where you can invest (in what instruments), for how long, what profit can be from each type of instrument and what is the risk of all this.

Sources of investment

To begin with, taking out a loan in order to invest is a bad idea. Investments are different, and in order to invest in, you often need to take out a loan.

Plus, one must take into account, what if the business in which the money was invested does not work as it should? If your money goes bust? How will you repay the loan? All these questions need to know clear answers before taking on such a burden.

The advantage of such a source of investment is that required amount can immediately and in large quantities be on hand, but the disadvantage is that for it, like for everything, you will have to pay, also with interest. The same can be said about borrowing money from friends or acquaintances: the instrument in which you invest may not generate profit, and the debt must be repaid anyway.

But if you have free funds, savings, etc., and you are ready not to spend them, but to invest - go ahead! The advantage of the second source is that only you are responsible for your own funds, if you want - spend, if you want - you invest, no one needs to pay for it. The downside is that in order to collect a certain amount, you need, which is often given with great difficulty. But even with a small amount of money, you can invest.

Where to invest

There are also speculative financial instruments, for example, futures, options, indices, etc.
By investment objectives :

Direct investments- investments that are carried out with the aim of acquiring control over an enterprise, through the acquisition of a controlling stake in this enterprise.

Often foreign investors make their investments precisely for this purpose: the organization does not have the means to subsist, an investor is urgently needed, there is no such thing in their country, but foreign investors will gladly invest in any promising project, but only on the condition that the controlling stake remains it is with the investor, and in the future he will be able to make the main decisions about the company.

He does not buy it out completely, but, in fact, gets full control over the enterprise. Attraction foreign investment popular in our country due to the fact that there is no money in its own treasury to invest in promising projects.

Portfolio investments- investments in a "set" of securities, that is, in the so-called "portfolio". You buy several types of securities of different companies, and you do not have a goal to control the company, you just want to make money on the growth of the value of these securities. This is the so-called passive ownership of securities.

Why not buy shares of one trustworthy company? Why invest in several at once? The answer to this question can be: why do many want to be the owners of companies? Right. So that other people work for the owner, who by their work would bring profit to the owner.

The same can be said about portfolio investments: you are the owner of LLC " Investment portfolio", And your employees are your financial assets that work for you and you manage them. Employees (financial instruments) that do not bring you profit, you fire (remove from the portfolio), and those that work well, leave, and select new ones to increase cash flow... This is why portfolio investments are needed.

Not financial investments - related to the purchase of patents, licenses, copyrights, etc.

By timing:

• Short-term investments- investments that will pay off and bring profit in up to 1 year;
• Medium-term investments- investments that will pay off and bring profit in a period of one to three years;
• Long term investment- an investment that will pay off and bring profit in a period of three years and more.

According to the degree of risk:

• Aggressive(high degree of risk, high possible profitability);
• Conservative(medium risk, average possible return);
• Moderate(low risk, low possible return).

Usually risk and return are directly proportional to each other: the higher the risk, the higher the return can be investment instrument the lower the risk, the lower the yield.

Often, the high risk scares away investors, even though the profitability is high. The solution to this problem can be diversification, that is, dividing your portfolio into high-risk, medium-risk and low-risk assets.

Thus, you have those instruments on which you are most likely to make a profit, but a small one, and there are those instruments on which you can make a large profit, but not necessarily you will get it at all. What to choose an investment strategy and how to diversify your portfolio, we will definitely tell you about this on our website.

The most important thing to remember when investing and assessing the possible risk: imagine that you have lost all the money you invested. Yes, yes, go ahead and imagine the worst outcome. Now think and feel, are you ready for this? How will you cope with such an outcome? What will you live on? What will you do next? Now, if all these questions did not make you feel sick, headache and colic, invest safely.

Pros and cons of investing

Investment pros:

• You can get a stable and high profit, while you do not need to work at a regular job 24 hours a day.
• Your main task is to choose the right investment instruments, and they will earn for you.
• You can earn quite a lot of money in a relatively short period of time, although it often depends on the initial investment amount.
• Investing has no "ceiling", invest as much and wherever you want.
• The ability to circumvent inflation. In the CIS countries, official inflation is on average 10-15% per year, and unofficial at 30-40% per year. It is not necessary with the help of investment that you can cover all inflation, especially unofficial, but at least some part of your money can be returned.
• Investments protect not only from inflation, but also from other disasters: a fall in the exchange rate of the ruble or dollar, unemployment, etc.
• Investing as such naturally increases your financial literacy... This factor is often even more important than the income itself. For example, if you take and re-launch the financial system: take and distribute to all people $ 10,000 each, then in a year some people will become millionaires, and some will become poor. Moreover, the millionaires are more likely to be those who, even before the "restart" financial system was rich. And all because it is they who are financially literate, they are the ones who know how to manage their money and increase it.

Cons of investing:

• Investing is always a risk. There are no risk-free investments. Anyone who tells you otherwise, apparently, really wants to deceive you.
• Investments “without nothing”, without it do not exist. Initially, you need to have at least a small supply of funds in order to invest.
• The opportunity to earn more often comes from more than just having start-up capital but also from its size. The more you invest, the greater the chance of making a big profit. In this case, it is always better to risk only your own money, and not borrowed money - what if you lose?
• Investments are often perceived as a trifling matter, as something that does not require time and preparation. This is not true. Learning to invest wisely takes both time and money.
• If you do not have time to learn how to invest, you need to contact a specialist, and this also costs money.

Conclusion

So, in this review article, we looked at what investment is and learned that in order to invest, you need to have funds for it. And better - strength, knowledge and means.

You can invest in the most different kinds instruments, both in the real sector of the economy (business) and in the financial one.

There are a great variety of investment instruments in each of the sectors, and all investments, depending on the timing of the investment, are divided into those that will pay off and give a profit quickly, in the middle period, and those from which the profit will have to wait for several years. In this case, usually, the greater the profit that can be obtained from the instrument, the higher the risk of losing all the invested money, and vice versa.

Investing is not an easy task! But if you figure it out, it's worth it. It is difficult to overestimate the ability to competently and correctly manage your financial resources, because money is in modern world mean the very opportunity to live.

Portfolio financial investments - the purchase of securities for the subsequent receipt of profit as dividends or the difference between buying and selling. To distribute risks, an investor needs to invest in securities of various sectors.

This type of investment makes it possible to plan, analyze and evaluate, as well as monitor the final results of activities in various sectors of the market.

Investing in various instruments is called portfolio investment. financial market with the subsequent receipt of profit. Most often, these instruments are stocks of any companies.

Real investments are investments in fixed assets of the company in order to obtain additional income in future.

Real and portfolio investments are ways to generate profits in the future. But in the first case, the investments will be tangible (since they are going to improve production capacities), and in the second, it will not always be possible to hold the purchased shares in our hands.

Profit comes from the difference between buying and selling paper (if you bought), or between selling and buying (if you were selling). Profit also arises in the form of stock dividends.

Portfolio real investment are carried out for a long-term period, while the investor is directly interested in the further successful activities of the company. Investment in a portfolio of securities is an investment in liquid securities for profit.

International portfolio investments - the purchase of securities of foreign companies, which are traded on international exchanges.

With portfolio investments, they work according to the following principles:

• Conservativeness. With a competent approach, it will consist in obtaining a small amount of profit, and not in the loss of the invested amount. Losses from high-risk stocks will be covered by the return on investment in safe stocks.
• It is necessary to allocate part of the portfolio for highly liquid shares... This is important for quickly responding to market action.
• Diversification... Portfolio financial investments should consist of shares of different companies operating in different sectors of the economy.

Portfolio international investments are widespread. But for this you need to have outputs on international markets capital.

Important! The optimal investment portfolio is a diversified portfolio. Break up the capital and invest in different sectors of the economy, thereby protecting yourself from the "drawdown" of a particular stock, covering it with liquid stocks.

We define the types

Consider portfolio investments: the profitability characteristic distinguishes the following types:

• highly profitable... A high level of risk is covered by a potentially high reward;
• middle income... They are the backbone of the portfolio, as they bring small but stable profits. The risks are lower here;
• combined... The portfolio is formed from securities of different risk levels and different yields.

Based on the timing, financial portfolio investments are:

• Short term... Investment term from an hour to six months.
• Medium-term... Investment term: from six months to a year.
• Long term... Term: more than a year.

Highlighting the advantages and disadvantages

Consider portfolio investments: pros and cons. The big advantage of this kind of investment is the buyout of part of the company. Acquisition of 50% of shares of one company gives the right to enter the board of directors and influence its development.

The disadvantages are called the following:

• A share is a highly liquid asset. Its cost can fluctuate within one day. Accordingly, the investor is obliged to track these movements in order, if necessary, to realize it and save the invested funds.
• Insurance of securities is impossible. In the event of bankruptcy of the company, the investor is paid a share of the property in accordance with the percentage of the acquired shares. There are always risks of losing all invested capital.

Based on this, it is the optimal solution. The bottom line is to form a portfolio of securities of different companies operating in different areas.

It is practically impossible for all sectors of the economy to “fall”, so losses from shares in one sector will overlap with profits from other profitable sectors of the economy invested in shares. As a result, the portfolio balance will be at the same level.

Also, to minimize risks, investors have the opportunity to transfer their portfolio to trust management... For example, Region Management Company is a portfolio investment with an optimal ratio of risk and reward. The company has been working in all areas of the financial market for over 20 years. Brokerage services and asset management are her top priorities.

Summing up

Portfolio investment is a type of investment in securities to generate additional income. Portfolio investments are carried out in the field of securities, bonds, etc. Income from portfolio investments- this is the receipt of dividends and the difference between the purchase and sale prices in the event of an increase in the value of the paper.

Important! Portfolio investments can be made using an exchange or intermediaries. Direct investments go directly to the enterprise, in whose fixed assets the investor invests.

Portfolio investments can be renegotiated by selling shares in one company and buying another. Direct investment cannot be reconsidered.

Portfolio investment is a direction where there is an opportunity to get good profits with a competent approach. To minimize losses, risks should be distributed by investing in securities of different sectors of the economy. This type of investment is suitable for those who have free funds and who are ready to donate part of them to make a profit.

Portfolio investment risks:

• illiterate approach when drawing up a portfolio. This leads to unnecessary losses. This portfolio will be ineffective;
• buying or selling securities at the wrong time is a direct path to loss of funds;
• solvency risks associated with the possibility of losses in the sale of securities;
• inflation. Its growth negatively affects stock market;
• sharp jumps interest rates have a negative impact on the value of the investor's securities;
• other types of risks that negatively affect the portfolio's profitability.

Portfolio investment - the investor receives interest from stock prices, accrued dividends. If the choice fell on portfolio investments - "Region", perhaps, will become the best partner for you in the financial market.

Successful investment ideas!

Today we will talk about what portfolio investment is, as well as what the key features of this investment method are.

In order for an investor to count on receiving the desired amount of income, he needs to invest the available capital in one or another industry, which is able to effectively develop and make a profit. The larger the capital the investor is able to use for investment, the more income he can expect in the future.

Portfolio investment is a block of shares / bonds with a certain value and owned by one investor. This block of shares / bonds can be acquired by the investor both for the purpose of receiving income in the form of dividends, and for their further resale after their value increases.

Professional investors argue that purchasing a block of shares / bonds for the purpose of generating income in the form of dividends is more risky, as it involves long-term holding of securities. During this time, the value of securities may significantly decrease, and if the situation develops unfavorably, their issuers may simply go bankrupt.

An important advantage of portfolio investments is that the investor gets the right to directly participate in the process of managing the enterprises in which he owns shares. At the same time, having a small block of shares, an investor cannot significantly influence the decision-making process and fully control the work of the enterprise.

Portfolio investments. Portfolio composition

Portfolio investment involves the creation of a portfolio of securities, which may include stocks / bonds of an enterprise, which have a variety of collateral and level of risk.

A standard investment portfolio includes securities of a certain type, but if necessary, its structure can be adjusted, which consists in replacing some securities with others.

With a competent approach, portfolio investments are able not only to reduce the level of risks to acceptable values, but also to provide improved investment conditions. A combination of shares / bonds of the same type allows the investor to rely not only on a stable income, but also makes the investment process safer.

Portfolio investment risks

The modern stock market is a well-oiled mechanism that is able to effectively attract capital to the economy of a state. The leadership of the state is trying with all its might to ensure the maximum profitable terms for potential investors in order to ensure the necessary capital flow in a particular sector of the economy.

Notwithstanding the above, portfolio investments, like any other type of investment, are associated with a certain level of risk, which is a decrease in potential profit.

To reduce the risks that accompany portfolio investments, you should adhere to fairly simple rules:

1. To reduce the level of potential risks, a competently executed one is required.
2. Before purchasing certain shares / bonds, it is necessary to collect as much information as possible about investment objects.
3. As insurance, it is necessary to create a source of reserve financing, the volume of which will be sufficient to cover potential losses.
4. It is also possible to insure the investor's risks associated with a change in the value of shares / bonds to a disadvantage for him.
5. When choosing securities, one should give preference to stocks / bonds with high liquidity, even if they have a lower yield. This is due to the fact that when the need arises, it will be much easier for you to replace some securities in your portfolio with others.

According to experienced investors, the main causes of portfolio investment losses are:

1. Wrong choice of stocks / bonds when creating an investment portfolio.
2. Incorrectly selected time for buying stocks / bonds.
3. Purchase of securities from low level liquidity, because of which, if necessary, the investor will incur certain losses if it is necessary to sell them promptly.

The main difference between portfolio investments and direct investments is that the investor does not take part in the management of the enterprise, but purchases shares / bonds only in order to receive dividends.

If you are a novice trader and do not have enough capital to create your own investment portfolio, then you still have the opportunity to do portfolio investment... You can buy a share in e, which specializes in portfolio investment.

Investment is an investment of money for a long period in various financial instruments. The main goal is to make a profit in the future. If as a result financial transaction income is not expected, this does not apply to investment. Such, however, to achieve the expected result will require efficient management, in order to secure your investments as much as possible from risks. Monetary assets tend to depreciate, as inflation eats up about 10-15% of the initial amount annually. not only saves money, but also multiplies it.

Investing: essence and features

Investing is one of the most profitable ways to increase capital. Sometimes this concept is confused with others related to economic activity... There is a fine line between the terms "speculation" and "investment". The main criterion for distinguishing is the investment period. Speculation - making a profit by buying and then reselling. Such investments are short-term and profit is formed due to the difference in cost.

If we consider lending and investment in the context of business financing, then the first means the transfer of funds on the condition that they will be returned after a specific period at a certain percentage. In the event of bankruptcy, obligations to creditors are initially settled. As for financing, unlike investing, its purpose is not to generate income.

We have invested our money in these funds:

Investing in real estate: pros and cons

It is considered reliable and profitable. The demand for housing is constantly growing, as are the prices. In addition, rental of real estate is always relevant. However, not everything is as simple as it seems initially. The advantage of such deposits is that real estate cannot completely depreciate, as, for example, the shares of a company. Apartments in any case will, if not buy, then rent, so such investments in a crisis can bring at least some income. At the lowest price, you can buy real estate, purchasing it before the commissioning of the object, in other words, during the construction period.

The disadvantages include low liquidity. If in the future it is necessary to release funds urgently, then the chosen investment option is not suitable. Buying and selling real estate will cost a lot of time to find suitable options and prepare various documentation - this is one of the main disadvantages of such investments. In addition, the investment requires a lot of money. In a crisis, real estate prices fall and may be unstable. The negative point is that the investor will incur fixed maintenance costs.

Investing in stocks: pros and cons

This type of investment requires a thorough analysis of the market, because the share price falls quickly and grows very slowly. During the leaps financial crisis, but also sharply go bankrupt. The investor may lose part of the capital, however, many, on the contrary, buy up shares at this time in the hope of a subsequent rise in prices. The risks are significant, but the expected profit will be rather big.

The pluses of this type of investment include affordability. Many brokers offer a $ 500 deposit. But on foreign sites, you will need at least several thousand dollars. High liquidity of investments is also a huge plus. Stock large companies can be sold instantly. Trading in securities takes place online, which is very convenient, since the immediate response to changes exchange market will avoid collapse. At the same time, it will be possible to make money on stocks in two ways: speculatively - on exchange rate fluctuations and on traditional dividends.

The main disadvantage is that shares can instantly lose their value in the event of a company's bankruptcy. In times of crisis, their prices are also falling rapidly. And the restoration of value lasts more than one year. It is not worth one company (sometimes in the securities of one industry), but building an investment portfolio requires a lot of money. When trading for small amounts, brokers are indispensable. It is convenient, but fraught with additional costs. When investing in securities, economic forces and political. Holders of ordinary shares may be left without dividends when the company has a losing year and its profits are directed to development. It is difficult for an inexperienced person to navigate and evaluate the benefits of a financial transaction, to see possible risks and choosing a specific company is not an easy task.

Investing in your own business: pros and cons

Investing in entrepreneurship in order to get profit from this activity in the future. You can earn money in several ways. Active income the investor receives when he is simultaneously the head of the business. If the company is managed by hired personnel, then the earnings will be passive. You can invest in new business or a ready-made case. Financing can be complete or the investor has only a share.

The benefits include a variety of destinations. A business is an asset that shows what funds are invested in and how they generate income. The investor can independently carry out business activities, influencing and managing investments personally. The undoubted advantage is that the profitability of such investments is not limited and, depending on the type of activity, can easily be 100%.

The main disadvantage of this investment is the high risk of losing your investment. At equity participation in business, disagreements can arise between investors, as a result of which one of the partners can be forced out of the business. When investing in your own business, you need to be prepared for regular or periodic additions. Earnings from own business does not come immediately, sometimes it takes several months, and sometimes even years. The investor will have to adjust to market conditions and control their business in order to avoid bankruptcy. Another disadvantage of such investments is dependence on the state.

Jewelry Investing: Pros and Cons

The cost of precious metals and stones is constantly growing, so the chosen investment method is very profitable. It is worth knowing that the price of either ingots will be more expensive than gold jewelry, since the first uses the highest standard metal, and secondly, alloys that lower the quality.

The main advantage of investing is high pace growth on jewelry. The most profitable option for the short-term period is considered to be deposits in an unallocated metal account.

The downside is that if the bank goes bankrupt, the investor will lose money. The main disadvantage of purchasing specifically jewelry is the inclusion of a jeweler's work in their cost. Exceptions are antiques, antique or exclusive items. When investing in gold bars, the disadvantage is that you will have to pay about 18% of the tax to the state. The selling price in the bank (like any currency) will be higher than the purchase price, therefore, in order to get real income, it will take a lot of time or a sharp jump in value upwards. It is not recommended to keep jewelry at home, it is better to use safe deposit box which costs money to maintain.

Investing in PAMM accounts: pros and cons

This is another way of investing, as a result of which the investor will receive passive income... - transfer of funds to the trust management of traders to make a profit as a result of speculative operations with currency on PAMM services. Now this is a very popular trend on the Internet, which appeared relatively recently, about ten years ago.

The main advantage of such investments is affordability. You don't need a lot of capital, for a start, a hundred dollars will be enough. The main driving force for investors is profitability. Quite normal level up to 50% per annum and higher. And in the case of using risky strategies, profit can be obtained very quickly. This way of investing is very convenient, since you can track the market position and perform various transactions online. The PAMM platform acts as a guarantor for settlements. Investors do not need to spend time studying literature and honing their skills, traders do it all. An investment portfolio is created by investing in various PAMM accounts, thereby minimizing the possibility of losing your money.

The main disadvantage is high risks... To control the actions of a trader, an investor must have at least a little understanding of the Forex market. This way of investing is not suitable for gamblers. In this case, a "sober" mind and prudence are required. The disadvantages include the commission for the trader's services, which, in the event of a profit, can be up to 70%. There are a lot of scammers on the Internet, so you need to be careful.

Investing in mutual funds: pros and cons

Mutual funds are an organization that receives funds from investors and invests them in securities. The cost is constantly growing due to the increase in the capital of the fund and the owner of the share receives a profit (it can be fixed in the case of the sale of the share).

The positive point is that capital management is carried out by professionals, because not everyone can figure it out on their own. Shares can be used as collateral, they are also inherited. A plus for many is the low entry threshold for mutual funds.

The downside is that funds do not guarantee returns. This is a long-term investment, however, the project can be profitable for a couple of years, and the next year it can work in a minus, covering the amount of all previous income. Profit tax is taken in the case of the sale of the share. The investor bears additional expenses, for example, the commission for entering an investment fund.

Investing in options: pros and cons

Like any other investment option, binary options trading has advantages and disadvantages. This is a type of exchange trading, as a result of which profit is formed due to the movement of the price of assets (currency, commodities, shares) in the financial markets.

The idea of ​​options trading is to predict a fall and rise in the value of an exchange-traded asset, while traders do not see auxiliary graphic elements that would help them get the maximum profit. On Russian market binary options appeared recently and there is not enough information about them in Russian. The platforms do not provide demo accounts, so beginners have nothing to practice on.

TO positive aspects such investment refers to the fact that the cost of options is lower than the price of shares. The undoubted advantage is that the investor can predict possible risks and profits in advance. High profitability is another advantage. Up to 85% of investments can sometimes be earned in a day. Trading takes place online, and it is convenient. You can start investing with twenty-five dollars.

The disadvantages of such investments are big risks... All money can be lost in one moment.

Investing in startups: pros and cons

A relatively new concept in the world of high-yield investments. It means a young business project created for profit after its development. A distinctive feature of startups is the originality of the idea. A business that is created from scratch, but already has analogues, does not belong to this concept.

The advantage is that startup offers are available to everyone on various investment Internet sites. Very often the directions in which projects are developing do not depend on real economy... In the case when several investors participate in a startup, the minimum investment is small amount and are available to many. You can receive passive income from a startup or be an active participant in the development of such a business.

The main disadvantage is the high risk of burnout and losing all investments or receiving less profit. Creation and development of a startup is a long process that requires a lot of effort and work, so income appears at least in a few months.

Investing in HYIPs: pros and cons

HYIPs are projects from which the investor has income from the funds invested by other investors. In other words, they are financial pyramids.

The main plus of investing in such highly profitable projects is logical - high profitability. In one day, it can be on average 1-3% net profit... With investments in the early stages of project development, you can really get a good profit. The amount of the deposit should be such that the investor will not be afraid to say goodbye. , you constantly need to monitor the project so as not to miss the moment of the peak of its development.

The main disadvantages are the short-term existence. Basically, HYIPs do not "live" longer than one year, with the rare exception of some large specimens. Another negative aspect is the loss of the entire invested amount, in the event of a sharp one. It is quite difficult to predict the development of funds, however, experienced investors manage to do this.

Investing in self-development: pros and cons

These investments are about developing skills and knowledge in one or more areas and constantly multiplying them. You can attend trainings, study at business schools, or educational institutions, read the relevant literature. The main thing is to choose the right direction, which will be really interesting for a person and in the future, due to personal knowledge, he will be able to make a profit. Real professionals in their field are highly valued in the labor market, so such investments are justified.

The disadvantages include regular. You will constantly have to improve your qualifications, improve and gain new knowledge in the chosen industry. You need to spend a lot of time on self-development.

In conclusion, it should be said that it is quite possible to get huge profits from investing. The main thing is to choose where to invest your money. It is sometimes difficult to determine the most profitable among the variety of offers. Before investing funds, you need to weigh all possible risks, familiarize yourself in detail and study the information about the object. investment activities... You should not make hasty conclusions and actions. It is recommended to consult with experienced people, because in any business there are professionals who can help you deal with all the intricacies, even if not for free, but this will help assess the possible risks and become a more savvy investor in the chosen area.