How do you approach your finances? If you’re like many Americans, you may want to invest, but you haven’t successfully made it a priority. Maybe you even have the funds in hand, but you don’t know how to get started. Well, it’s time to change your money mindset.
By familiarizing yourself with some different approaches to investing and creating a plan that will make the most of your money, you can build an impressive and diverse portfolio based on your unique financial needs.
Bond Basics
Bonds, fixed income instruments that represent a loan made by an investor to a borrower (typically corporate or governmental), are among the most straightforward investment options. They’re also low risk, especially treasury bonds, bills, and notes.
Though there are slight differences between the three, each guarantees at least a modest return, though market conditions can impact the value of Treasury securities. If you absolutely can’t afford to lose money, these investments can be a good choice, but they also mean foregoing bigger gains.
Futures For Every Investor
For those looking for more advanced investment opportunities, as well as an approach that requires a more strategic approach, consider investing in futures.
Futures are contracts––typically for commodities––and they serve as a way to predict or bet on market prices at some point further down the line. Futures now cover ETFs, bonds, and cryptocurrencies.
Depending on your level of experience and how much you’re willing to risk, there are several different ways to approach futures investing. For starters, choosing an appropriate futures trading platform is essential. New traders tend to do best with platforms that are easy to use, offer risk management tools, and experienced broker support.
As you get a better handle on the process, you’ll want access to current market data, a customizable dashboard, and tools to master spread trading. Unlike a lot of other markets, futures trading can be straightforward or hugely strategic depending on your preferences and experience level.
Master Mainstream Markets
In the space between bonds and futures are more conventional stocks. Stocks represent a way of investing in publicly held businesses and, ideally, profiting off of their success. Some are valued at just a few cents a share, while others are well over $100 per unit. Prices typically fluctuate based on quarterly profit reports, overall economic trends, and new news such as product announcements.
Savvy investors understand how to interpret activity across sectors side-by-side to make predictions. For instance, looking at mining stock performance to understand how tech companies relying on those raw materials might fare.
Cryptocurrency Considerations
Cryptocurrencies are the new kids on the block compared to other forms of investment, and their long-term prospects are still relatively unknown. Companies regularly launch new currencies, and it’s hard to predict the short-term prospects for anyone of them. So, how should you respond to all this speculation and uncertainty?
Consider diversifying your portfolio by investing in cryptocurrency, but not more than you can risk losing. With typical stocks or futures, you might take a loss, but you’ll seldom lose everything. While with cryptocurrency, there’s always a chance the whole system could go under. As with so many investments, with big risks come big rewards, and with the right timing, you could also come away with huge earnings.
No single investment strategy will work for everyone, but by slowly building a diversified portfolio based on your financial capacity and a growing understanding of the process, you can make your money work harder for you.
Craig Lebrau is the CMO of Media Insider, a Wyoming-based PR company that aims to disrupt the way companies communicate their brand in the digital era.
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