Investing is a very interesting topic.
It’s one of those things that everyone knows they should be doing, but many people don’t because they’re not sure how, when, or where to invest.
Today, we’ll talk about three solid investment vehicles ordered by risk from low to high, how they work, and why they are profitable.
So, let’s get right to it.
Investing In Bonds
Bonds are great for investors that are looking to make more money than is offered through interest on a savings account, but are not willing to take on much risk.
While the yields on bonds are relatively low compared to other investment types, the risks associated with these types of investments are slim to none.
Bonds are essentially debt. They can come by way of treasury bonds, municipal bonds, and more.
However, they all work in about the same way. When you purchase a bond, what you’re really doing is making a loan.
The company or municipality that you give the loan to agrees to pay you a specific amount of money as interest on the debt as well as pay back the debt at a predetermined time.
These are the safest forms of investments because even if a company does go out of business, they have to pay their bond holders back before paying their stock holders back.
Traditional Stock Market Investing
For those looking for a larger return and willing to take on more risk in order to achieve a larger return, traditional stock market investing is a great way to go.
When purchasing stocks, investors aren’t issuing debt. Instead, they are literally buying a small piece of the company they are investing in.
Therefore, when the company produces earnings, they are entitled to their piece of the earnings. The idea behind traditional stock market investments is to purchase stocks at a relatively low price in a company that the investor believes will grow in value.
As the company grows in value, the stock in the company becomes more valuable as well.
At some point, the investor sells their shares for the current market value, and if the proper research was done before purchasing the shares, the investor will realize gains from the growth in the value of the company.
Binary Options Trading
For those that are looking to maximize the amount of money they make from their investments, and of course are willing to take on the high risk associated with doing so, binary options are a great way to go.
Binary options are a derivative investment. This means that the binary option itself has absolutely no value.
Instead, the value in the trade is derived from the underlying asset associated with the trade. When trading binary options, traders make predictions with regard to which way the value of a financial asset is going to go over a predetermined period of time.
If the trader makes accurate predictions, the options will expire in the money and the trader will earn returns on their investments of more than 70%.
However, if the predictions are incorrect, the trader will lose 100% of their initial investment in the option.
It is possible to manage risk because the trader has complete control over the amount of money they are willing to risk at any given time.
So essentially, binary options yield high profits with fixed risk.
It’s understandable that many people don’t invest because they don’t know how to invest or where to put their money.
However, the reality is that investing is actually a relatively simple process.
Using any of the vehicles above, you have the opportunity to let your money work for you!
So, what are you waiting for?
Start investing and making your money grow!