As you may already know, there are many investment options available out there. Each of the options will offer its unique characteristics and as investors, we can choose the best one that match our investment’s objectives and needs. These investment options are very important to be known since the right choice will offer optimum investment result. Also that, these various investment options are the good thing since offers the way to do the investments distribution.
Yeah, we can distribute our investments to each available options to reduce the investment risk. Based on my experience, distributed investment offers safer investment than if only focus in one investment option. Therefore, let’s learn about the various investments options available:
Investment Options #1: Cash Money
Indeed, cash is more like a tool to invest. for sure, investor cannot invest if not have any money in the hands. Also that, investor should have enough money to fulfill their daily needs before start to invest. In this, the cash money can be told as investment if we save or deposit it in the bank. The saving or deposit interest will be our investment return in this case. It is important to invest this cash money into bank (either saving or deposit) since it must be liquid and can be used at any time. The total money should be 10% of investor’s total wealthy or at least, can fulfill the 6 months needs. In here, cash money acts as guardian if something happened with our other investment options.
Investment Options #2: Treasuries/Obligations
Treasuries/Obligation is another options for investment. Having treasuries mean that investor lend the money to country or company with certain level of interest as the investment return. The Treasuries/Obligations investment offers a stable and almost free risk return of investment. However as many said, no pain no gain – so, this investment option only offer limited return of investment (ROI) since offer less risk. This investment option usually offer a ROI in above of inflation or deposit interest.
Investment Options #3: Stocks/Shares
Stocks/Shares is another options for investment. Indeed, Stocks/Shares is a favorite investment option for many investors since offers high return of investment (ROI). However, we also have higher investment risk in here but it is still worthy since if handle it right, the risk can be minimized. Stocks/Shares offers the company’s ownership so this investment will be very related to companies business performance. The better the performance, the better the return of investment (ROI). In this investment, we should choose the stocks/shares from company with growth from time to time – usually from year to year.
Investment Options #4: Mutual Funds
Mutual Funds can be a good investment option for most of people since offer an easy way to invest but with good return of investment (ROI). Sometimes, the ROI even better than the stocks/shares investment. It is simple because investor only need to deposit the money to Mutual Funds company and then the skilled funds manager will manage and invest our money to the right Mutual Funds instruments. In here, we have less investment risk if compare with the stocks/shares investment. However, usually, the return of investment (ROI) is also lower – but as I mentioned, in certain condition, Mutual Funds can offer more ROI than the stocks/shares investment.
Investment Options #5: Derivative
Derivative is also another high risk investment option. In here, we invest our money into derivative products from available investment instruments. As example, investor can invest their money in forex (foreign exchange) or options market. The main characteristics of this investment is that the hedging. Yeah, this derivative investment instruments is created as hedging for the main investment instruments but then, it grows become one of investment options with high return of investment (ROI).
Investment Options #6: Property
Property is a low risk but less liquid investment option. Indeed, Property is also called as the must benefit investment. Since not liquid, this investment is usually for very long-term investment. The return of investment (ROI) can be gotten from the future selling value as well as from the rent. Property can be a good option to protect our money since the price increasing can beat the inflation – or at least, the same as the inflation. As long as there is no special situation such as the last United States (U.S.) mortgage bubble.
Have a good result with the best investment options everyone!