Stocks, shares, and property investments in the years to come
Investing your money can prove to be rather tricky, and not just because of the losses that you could incur, but also in terms of finding an investment that will yield optimal returns. If you’re not just throwing about some expendable income, you’ll want to do your homework thoroughly. This will mean consulting with a financial planner/advisor with an extensive and successful portfolio. The internet is awash with financially applicable information and while your financial planner might roll his or her eyes when you mention your findings, you can still come across a wealth of knowledge online. Everything from the understanding of indices trading to penny stocks, down to real estate investing and more is there for your perusal and empowerment. The financial sector offers a wealth of possibilities designed to suit all pockets. For instance, speculation on currencies or commodities can all require a relatively low amount of capital with the possibility of incredibly decent returns. Short-term investments like these fall within the category of day trading. However, if you’re looking to capitalise on long-term investments, which usually come with more stability and a higher return, then stocks and property are the preferred avenues to explore.
Investing in property
While property or real estate is considered a shoe-in when it comes to financial returns, it comes with its own set of hurdles. Research in this sector is of paramount importance. The property market is not one endeavoured lightly or on a whim and the returns are nowhere near immediate. An investment of this nature means that you’re in it for the long haul. As an asset, property cannot be easily liquidated or cashed in, so there’s no turning to it if you suddenly find yourself in a squeeze. If you’re in the buying and selling of property then the typical risks you’re going to encounter will be repairs and/or refurbishments. If you’re a landlord and you’re renting out a property, then not only can there be repairs and/or occasional upkeep, but bad tenants can also easily upset the apple cart. Whether you’re investing in property or you’re renting out a property, you might want to hand over the entire management process to a professional and thus external company. You may want to seek out a turnkey solution that would include contracting for upkeep as well as overseeing your rental situation. This can impact your bottom line, but it can also reduce stress.
Investing in stocks
Compared to property, the stock market is an entirely different animal that’s prone to a slew of variables such as inflation, economics, market reactions, geopolitical events and other fluctuations. Volatility can be quite rife on the stock market, hence requiring constant upskilling and upkeep in terms of applicable knowledge. Geopolitical events can have dire consequences, especially when it comes to companies with multinational interests. For instance, if Nike has a factory in a third-world country that experiences a sudden and violent regime change, its share price can sustain a significant dive overnight. Stock prices are also dictated by other related variables such as tax revisions, regulations, monetary policies, economic cycles as well as interest rates established by a country’s central bank. On the plus side, for the majority of investors, start-up capital can be quite low, adding to the appeal of buying stock. As opposed to property, stocks are liquid and can thus be easily bought and sold – making them a reliant asset to have in times of an emergency. Due to the extensive nature of the stock market, you can also carve out a diverse portfolio for yourself. However, always keep in mind that stocks are prone to volatility and thus can be riskier.