Tag: investing

All investing related articles are found here. Educative, informative and written clearly.

Crypto cannabis is very hot now!

The cannabis industry is hotter than ever, cryptocurrencies got high

3 min read

Crypto cannabis is very hot now. PotCoins are digital coins you can send via the internet, which allow cannabis enthusiasts to interact, transact, communicate and grow together.

Cannabis cryptocurrencies or weed coins are tokens by the marijuana industry. Pot is now completely legal in Canada and Uruguay, and several states in the United States. Consumption of marijuana for medical use is legal in some other states, and also in countries like Israel and the Czech Republic.

Crypto cannabis market

The cannabis market is one of the quickest growing markets but is held back in some countries by states laws that still consider it an illegal drug. That makes problems for the industry to raise money, which is where cannabis cryptocurrencies enter the scene. Weed coins intend to change the nature of the medium of payments for the legalized cannabis industry since traditional banking systems make obstructions for the business.

The booming marijuana industry and cryptocurrencies could present an investment opportunity.

There are several ways to invest in crypto cannabis and it becomes easier to buy legal weed with cryptocurrency. Hence, like any other investment, comes with its own risks. In case you are interested, here is the list of 10 weed coins in the market.

1. PotCoin (POT) – This decentralized crypto became the first of many cannabis cryptocurrencies in 2014. Since then PotCoin is the gold standard. POT’s max supply is 420 million.PotCoin’s market cap peaked at $90,097,520 on January 1, 2018. In June, PotCoin spiked again when basketball player Dennis Rodman wore a PotCoin.com t-shirt to the US-North Korea summit. PotCoin’s valuation was up for 20% on that day. You can buy PotCoin on Bittrex, Changelly, PotcoinTrade, and PotWallet. With a market cap of well over $10 million, PotCoin is the highest valued weed cryptocurrency.

2. HempCoin (THC) – HempCoin (THC) isn’t designed just for cannabis. THC coin is designed for the entire agriculture industry, from tobacco to cannabis and hemp, came into being to facilitate buying farming supplies. Today, you can trade THC on Bittrex and qTrade, it hit a record high market cap of almost $160 million in early 2018.HempCoin is expanding. By 2019, HempCoin will introduce HempPay, a payment platform for buying weed. HempPay will be an app, website and cryptocurrency credit card.

3. Paragon (PRG) – Paragon isn’t for buying weed, it isn’t like other cannabis cryptocurrencies. Paragon’s PRG token is focused on helping weed businesses grow. Paragon developed ParagonCoin (PRG) in order to provide cannabis businesses to pay rent. What is it about? ParagonSpace is a brand-new cannabis coworking space in Los Angeles and PRG is the only currency that ParagonSpace accepts, whether you’re buying coffee or renting an office.ParagonSpace hopes that their Ethereum-based cryptocurrency will work for business to business and business to customer interactions.ParagonCoin is still in its early days. They’re still building an all-encompassing cannabis business ecosystem with smart contracts, a coworking space, and cryptocurrency, all on the blockchain. Paragon’s total supply is of 164,936,584.

More participants in the crypto cannabis market

4. CannabisCoin (CANN) – CannabisCoin is another cryptocurrency designed to making buying medical marijuana easier. It came into 2014 a few months after PotCoin was CannabisCoin. It is peer-to-peer open source currency and like PotCoin, was created to make transactions for medical marijuana dispensaries easier. Initially, it was very popular but it has generally failed to deliver much for investors. This cannabis crypto made waves back in 2014 when dispensaries sold 1 gram of cannabis for one CannabisCoin.The total supply of CannabisCoin is set at 91,859,176, with over 77 million currently in circulation. The currency has a market cap of $5.2 million.

5. CannaCoin (CCN) – Cannacoin is a cannabis altcoin that runs on its own decentralized blockchain and has its own Cannacoin wallet. Forked off Litecoin, Cannacoin uses Proof of Stake-Velocity. Cannacoin is open-source and developers can use it to create other applications. For example, CannaPay a website committed to cannabis credit cards and goes through its own ICO is connected to Cannacoin’s protocol. Cannasight, another Cannacoin project, provides developers to create a multiplicity of open-source applications. Cannacoin has been around since 2014, most of its projects are in early stages of development. CannaCoin has a market cap of $272,000. There’s a circulating supply of 4.7 million CannaCoins.

6. DopeCoin (DOPE) – DopeCoin, was launched in 2014, was remodeled as DopeCoinGold in early 2017. DopeCoin aim is to give people a way to buy weed anonymously without paying transaction fees. Their consideration doesn’t cover legal matters. They don’t care if someone is getting weed from a licensed dispensary or an online black market. Merchants in both the U.S. and in Europe accept DopeCoin payments.DopeCoin also has its own cryptocurrency wallet. This dissenter cannabis cryptocurrency is capped at 200 million.

7. Tokes (TKS) – This cannabis currency aims to move the entire weed supply chain and customer transactions away from cash. Unlike other cannabis cryptocurrencies which operate in a legal gray area, the Tokes platform follows anti-money laundering rules and Know Your Customer financial guidelines to detect money laundering. Tokes provides the security of a Financial Industry Regulatory Authority compliant financial institution. You can buy TKS, keep it in a Waves Wallet and spend it as currency at certain dispensaries. There is a supply of 50 million TKS.

8. GanjaCoin (MRJA) – GanjaCoin is weed cryptocurrency for buying weed both from dispensaries and online. On GanjaCoin’s website, you can buy CBD products and smoking accessories. GanjaCoin is a privately created cryptocurrency but is working on dispensary partnerships.GanjaCoin offers the comfort of virtual payment. For weed producers, cannabis cryptocurrency is even more favorable. With GanjaCoin, they pay low fees via blockchain.GanjaCoin is unique because it’s the first one backed by feminized cannabis seeds. In the future, GanjaCoin will back each coin with a whole gram of weed. The benefit of using this model, in addition to offering a value guarantee, is that it keeps supply low. There will only ever be 42,000,000 GanjaCoins, which is lower than other cannabis cryptocurrencies. GanjaCoin is currently listed on MasternodeXchange and Stocks. Exchange and provides their own cryptocurrency wallet.

9. Growers International (GRWI) – Growers International dates back to 2015. They wanted to meet the particular needs of weed producers. As a member of Growers International’s decentralized platform, marijuana growers can chart seed-to-sale data and keep a record of their plants’ genetic makeup. The immutability of the decentralized ledger lets growers prove a strain’s authenticity. Their partners are already buying supplies using the GRWI token. Growers International plans on offering smart contracts for cannabis farmers, they can use their smart contracts to complete supply costs, electric, labor, etc. Growers International has a cryptocurrency wallet. GRWI is trading on Cryptopia and CCEX.

10. KushCoin (KUSH) – KushCoin is based on blockchain technology to the medical marijuana supply chain. This cannabis cryptocurrency seeks to connect the process of growing and selling weed, staying in compliance with federal, state and local laws. The point is to have different levels of the supply chain so, consumers to avoid high fees and inconvenience by paying with a cryptocurrency. In 2014, KushCoin started with the goal of addressing all these issues. Their plan was to create a KushCoin wallet, a seed bank for KushCoin users and a crypto credit card. According to Bitcoin Forum, someone hacked KushCoin. But the developer recently got back control.
There are also GreenMed (GRMD), Sativacoin (STV), Cannation (CNNC), Bongger (BGR), Marijuanacoin (MAR), BlazerCoin (BLAZR), Budbo (BUBO).

Bottom line: The most important aspect of starting your own cannabis-related business is actually the most important aspect of starting any kind of business: picking the angle you’re most happy with.

Investing in a cannabis company comes with a number of risks that could negatively affect investment at any time. There remains a large amount of uncertainty in this emerging sector, especially as laws and business models continue to evolve.
Some investors may see others flocking toward an emerging sector and can be compelled to follow out of fear of missing out on an opportunity.

However, behavioral insights shed light into the way that people make decisions about money and has shown that investors who follow other investors’ behavior are more likely to invest in speculative bubbles that could burst. If that happens, investors could stand to lose some or all of their investment. But isn’t every investment potentially risky?

The risks in crypto cannabis

Many cannabis companies are promising investors the opportunity to capitalize on the potential for considerable future growth. A number of companies are looking to expand.

The cannabis industry is hotter than ever, with new deals announced almost every day, and merger and acquisition activity at an all-time high.

As per Viridian Capital Advisors estimates, investments in the marijuana industry reached $6.6 billion in the first 10 months of 2018. According to New Frontier Data, sales are expected to surpass $9.5 billion in 2018, some forecasts say to $12 billion.
Risk Disclosure (read carefully!)

21st October 2018
Cannabis VS Bitcoin Both Are the Two “Sexiest” Plays.

Cannabis stocks just like bitcoin stock can be hot investment choice these days

By Guy Avtalyon

If you have a dilemma in selecting the stocks, cannabis vs bitcoin, this exactly you have to read. Cannabis shares are a temporary hum. Wait! Didn’t they say exactly the same about Bitcoin?

Traditional Wall Street and media gatekeepers are late.

The fact is that Bitcoin lacks a time-tested business model and fundamental backing, and it pays no dividend. The other fact, marijuana is illegal in almost every country, putting the business model in jeopardy.

Pot stocks are more tangible speculative investments, traded and regulated on recognized stock exchanges, but still subject to a variety of market and regulatory risks. We know that advisors can caution their clients on the risks of investing in cannabis stocks, and the risks are there at current merits. It was the same in the case of Bitcoin.

Cannabis industry

But the cannabis industry may offer trace to the future of Bitcoin. Because despite their different paths, the crypto and cannabis are siblings. Why? Just spend a few minutes on Reddit pages committed to trading, Bitcoin, and cannabis and you will see similarities of the group. According to TD Ameritrade Inc., trading in pot stocks is superiorly done by millennial-aged males. The stats for crypto look almost the same.

We are witnessing an explosion of interest in cryptocurrencies, cannabis stocks, and ETFs. And particularly from millennials. What do younger clients need? They love technology. They want to be educated investors, that’s why they are in need of education. They’re younger in their investing and trading careers. But they know what they want. They want to trade 100 shares of stocks at the table in the restaurant using some bot. They don’t want to miss the boat.

Cannabis vs Bitcoin

If you’re a long-term investor type who’s not at all interested in trading, then you’re on the right track to becoming a wealthy investor over the long term. Sticking with such a reasonable investment strategy can be tough, however, especially if you constantly hear about how a friend of a friend of yours got rich overnight by investing in Bitcoin or Canopy Growth (TSX:WEED) (NYSE:CGC) stock.

You can ignore the hype, as it has nothing to do with you. It’s difficult to tell the difference between a bubble and an actual paradigm shift that could lead to massive riches over the near term.

Today, cannabis stocks and Bitcoin are the two “sexiest” plays.

While the word “bubble” has been thrown by some experts, other equally qualified, are on the other side and are thinking “opportunity of a lifetime.” Being on the right side isn’t a matter of how clever you are. You can find a lot of examples of how some very smart guy has fallen as a victim on the wrong side of the “sexy play” of his time.

When it comes to subjects like the rapidly emerging rising cannabis market or blockchain-based cryptocurrencies, it’s hard to know what you’re dealing with as an investor. Nobody really knows how much new entities will act in the public markets over a long period. Attempts to make comparisons to events that happened in the past can make some sense but can’t help a lot.

Neither cryptocurrencies nor cannabis are suitable for conservative investors. It is for visionaries, for those who can perceive the future and recognize the chances. Set a limit and stay within it.

There are many people in the crypto industry believing in a bright future. As well as there are supporters of the legalization of cannabis. Technology companies, for example, SinglePoint and POSaBIT, are working to create a payment method for dispensaries and consumers using bitcoin. Recently, some cryptos emerge specifically for cannabis transactions.
This isn’t the first time that stocks in a hot niche have risen. We all know what happened with bitcoin stock a year ago. The companies specializing in the crypto have had fantastic gains.

Some investors never look back at overhyped fields once they aren’t trending, but investors who invested hard-earned money into most popular stocks usually learn the harder way what results can be.

Currently, a limited number of marijuana stocks is accessible to most investors. We’ve seen some massive moves in marijuana stocks. Those gains stem from the fact that investors who want to invest in marijuana have limited options available to them.

Why cannabis vs bitcoin?

The same case we already saw with many Bitcoin stocks.

In 2017, the top-performing Bitcoin stocks have less liquidity than many others. They stood very low on that list. But it reversed. In 2018, bitcoin declined in its volatility.
Of course, speaking about cannabis stocks we can expect winners, but we can’t be sure where to expect. Maybe cannabis investors could learn something from the bitcoin incredible boost in the past. Perhaps the same could occur. Sometimes, success may occur in unexpected places. As an investor in cannabis stocks, just be ready to see the secondary effects. Try to recognize how they can influence the companies that are not always obviously related.

Investors want to get rich from cannabis stocks, but past investing crazes and experience with cryptos have often left people wishing they hadn’t fallen for the allure of these markets. You can avoid repeating those mistakes and improve your chances of being successful with your investments in the long run. Just get more knowledge, learn permanent, test, and measure everything twice.

21st October 2018
India Could Treat Unregulated Crypto Assets as Illegal

2 min read

According to Moneycontrol, a report which is being prepared by a committee headed by India’s Economic Affairs Secretary, Subhash Chandra Garg, may propose amendments to the existing laws with a view of making it illegal to hold crypto assets that are not approved by the government.

Does it mean that could soon be illegal to hold cryptocurrencies that lack the government’s seal of approval in the world’s largest democracy?

The panel will propose legislative amendments and recommending punishment for those holding unapproved crypto assets and also will penalties for those who flout the law.

This move is the result of the government’s attitude that crypto assets which are unregulated should be kept out of the Indian financial system to prevent them from being used to aid illegalities. Under this formulation, they mean evading taxes as well as in Ponzi and multi-level marketing schemes.

According to the same source, holding unregulated crypto assets like bitcoin in India could attract punishment.

India treats crypto as illegal.

Why this isn’t surprising?

The Subhash Garg-committee was placed last year and have to submit its report in December. Besides the Economic Affairs Secretary, the other members of the committee come from India’s central bank and the country’s securities markets regulator.

It is expected the Subhash Garg-panel report be adopted. Having in mind their previous attitude, there will not be a surprise.

Anti-Cryptocurrency opinions have various government agencies in India. This spring, the Reserve Bank of India (RBI) barred banks and financial companies dealing with virtual currencies and banned these financial institutions from allowing their clients to buy cryptocurrencies. They were given three months’ time (ending June 2018) to exit from any such services if they were offering.

“…with immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling VCs [Virtual Currencies],” read part of a statement issued by the RBI as reported by CCN. “Regulated entities which already provide such services shall exit the relationship within a specified time.”

The consequences after the ban are still felt today.

In September one of the biggest cryptocurrency exchanges in India, Zebpay, announced that it was shutting down after it found itself unable to operate without access to banking services. That is the indicator that India treats crypto as illegal.

The negative consequences of the ban have not been limited to cryptocurrency exchanges, however, and have spread to the wider blockchain ecosystem. As CCN reported in September, this was leading to a ‘blockchain brain drain’ as well as ‘blockchain capital flight’ to jurisdictions with more conducive environments such as Malta, Estonia, Switzerland, and Thailand.

What can be expected from these last stages of deliberation?

The government view is that unregulated crypto assets should not be allowed to move into the financial system. In short, India treats crypto as illegal. So, it is expectable that the Garg-panel is likely to recommend appropriate amendments in existing laws, defining the punitive measures for those found holding illegal crypto assets.

In his budget speech for 2018-19, finance minister Arun Jaitley had pointed that cryptocurrency was not legal tender in India, but hinted that the government was open to adopting the underlying technology, called blockchain, to bring in more efficiencies in India’s digital payment systems because it allows keeping a record of a chain of transactions, eliminating the need of intermediaries.

According to Moneycontrol, officials of the capital markets watchdog, the Securities Exchange Board of India (SEBI) have also organized tours to Japan’s Financial Services Agency; the UK’s Financial Conduct Authority, and Swiss Financial Market Supervisory Authority,

The study tours “help engage with the international regulators and gain a deeper understanding of the systems and mechanisms,” SEBI said in it’s in the annual report for 2017-18.

And December is near. The trail of the devastation of cryptocurrency exchanges is visible.

But despite these moves of various governments, which are understandable in some sense because they have no control over the crypto, cryptocurrency will survive. We will be witnesses.

Risk Disclosure (read carefully!)

18th October 2018
Ways to Earn Bitcoin

2 min read

After Bitcoin become one of the hottest new investment assets it has surprised many who once believed the blockchain-driven cryptocurrency would never have real-world value. It has also produced huge interest. This interest, as the nature of this digital currency as well, cause great opportunities for making extra money.

Traders Paradise wants to present you several ways how to make money with Bitcoin and several different ways to earn Bitcoin.

How to earn bitcoin?

There is a huge amount of money to be made in this market, and many of the ways of earning with Bitcoin may result in small amounts. It shouldn’t dishearten you. Even small amounts of Bitcoin can be useful assets.

How?

The rapid growth of the value of the cryptocurrency gives possibility. If you want to accumulate larger sums of Bitcoin, that’s also entirely possible. It requires some initial investment of course.

Let’s begin exploring the different ways in which you can start making money and earn Bitcoin.

Selling Bitcoin-related products

It is the fact that there are ways to make money from Bitcoin without actually owning any. For instance, you can sell products and services and be paid in Bitcoin.

The easiest way to get into being an affiliate marketer for Bitcoin products is to promote Bitcoin mining devices through some affiliate program. Point is that you can send visitors from your website and receive a small commission on any products they buy there. For that, you’ll need a website on which to post your affiliate links. The good news is that, since Bitcoin miners are generally priced at $100+, you don’t need to sell too many of them to start making some decent money from your marketing efforts.

The same concept can also be applied to Bitcoin services. Many services surrounding Bitcoin offer generous commissions to marketers who refer customers to them. If you’re going to create a website, integrating promotions for services can be helpful to your readers and profitable to you. This is one way to earn bitcoin.

Do freelance jobs and get paid and earn Bitcoin

A huge online marketplace for freelance services exists to connect freelance workers with customers. A new twist has come in the form sites that send payments to freelancers in Bitcoin. If you are freelancer already or have a skill that businesses would be willing to pay you for, you may be able to render services in exchange for fairly significant amounts of Bitcoin.

Freelancing in exchange for Bitcoin has two advantages: first, unlike mining or investing, there is little or no initial cost for most forms of freelance work and the second, some freelance jobs can pay amounts of Bitcoin worth dozens or even hundreds of dollars. If you want to earn Bitcoin at a reasonably fast rate without investing a large amount of money at the outset, freelancing can be your best option.

You’ll just need to sign up for a freelance marketplace that pays in Bitcoin.

Invest in Bitcoin and Bitcoin derivatives

Investing in Bitcoin, indeed still not as common as investing in stocks and bonds, but is fast moving into the financial mainstream. To be honest, investment is one of the profitable ways of making money with Bitcoin.

Basic Bitcoin investment is the simple buying and holding Bitcoin until its price goes up enough to gain a profit. Bitcoin has produced some incredible gains for investors in past years. If you had invested just $200 into Bitcoin when it was worth $1 in early 2011, your investment would be worth millions today. This is an ultra example, which demonstrates how profitable Bitcoin investment has been for some traders who have been willing to hold their investments for long periods of time.

High-risk investment

In the past Bitcoin exchange was easy to hack, like Mt. Gox exchange which was hacked 2014. But now the new generation of more secure exchanges come onto the market to supply Bitcoin services.

A less known way of investing in Bitcoin is to trade it as a CFD, or contract for difference. In core, a CFD is a derivative instrument that is based on the price of an asset, in the case of Bitcoin.

Unlike standard investment, however, CFDs don’t involve actually buying the asset they mirror. Instead, traders open positions on the movement of an asset’s price with a CFD broker. CFDs typically have high leverage rates. Meaning that both gains and losses are higher than they would be in a more traditional investment environment.

Used properly, Bitcoin CFDs can be fairly profitable. If you’re too careless with them, they can be high-risk investments. It depends on your personal level of risk tolerance.

Bitcoin mining

Mining refers to the use of computer hardware to automatically perform a set of mathematical operations. That, in turn, creates new Bitcoin. Bitcoin is set up that only 21 million can ever be produced. At this moment, more than four million are on the table for Bitcoin miners.

You have to know one important fact about Bitcoin mining before getting into the difficulty increases over time, which means, it will take more time and more computing power to generate each following Bitcoin.

At the beginning of Bitcoin, cryptocurrency enthusiasts were able to use graphics processing units on regular computers for mining. But nowadays the difficulty has gone up so much that much more specialized equipment is needed.

To start Bitcoin mining, you’ll need to invest in external devices called a Bitcoin miner. That provides the necessary computing power to produce Bitcoin. The price of a Bitcoin miner will vary based on its processing ability.

Small USB miners start at under $100, while larger, more powerful mining devices can cost thousands of dollars. Although the initial investment of buying a Bitcoin miner can be fairly large, it allows you to produce your own permanent flow of new Bitcoin until the full 21 million has been reached.

Start mining

If you decide to start mining yourself, you will have the peripheral costs too, like electricity costs, for example. If you have a large miner that produces a large amount of heat, you may have to install a cooling system.

These costs can eat up much of the profit margin in Bitcoin mining. Fortunately, if Bitcoin continues to grow in value, these costs will be compensated later.

But there is another way you can get in on the action. It is known as contract mining. In contract mining, you’ll pay a fee in exchange for a company to employ its Bitcoin mining equipment on your behalf. This contract will last for some period of time. And all Bitcoin mined during that time on the equipment you’ve contracted will be sent to your Bitcoin wallet. Contract mining is an easy and passive way for you to accumulate Bitcoin. But it will cost more over the long period than having your own Bitcoin mining equipment.

What else you can do to earn Bitcoin?

For example, you can do micro-tasks small, simple actions, such as viewing an advertisement or engaging with a post on social media. Though the pay is usually very low, micro-tasks are the simplest way to get into Bitcoin.

Bitcoin faucets are a bit like micro-tasks in the sense that they pay very small amounts of Bitcoin in exchange for a small amount of your time – often around 1 Satoshi, which is a hundredth of a millionth BTC. In the case of faucets, though, Bitcoin is usually available to be claimed by users at a set interval, such as every five minutes.

Or you can create content to be monetized with Bitcoin-based ads. Maybe you can lend out the Bitcoin you already have and generate passive income. But if you have respectable knowledge you can make a decent amount of money form helping other people learn about cryptocurrencies.

Bottom line

The easiest and fastest way to have Bitcoin is to buy instantly with a credit card or debit card. You can acquire $50 or less for Bitcoin, fast and usually within 10 minutes. However, you may be new to the entire cryptocurrency concept and for that we recommend you learn these few things above.

Bitcoin is extremely empowering but also different than the currency you know and use every day.

Risk Disclosure (read carefully!)

17th October 2018
Alternative Investments Role in Diversified Investment
Investors should pay attention to several issues when adding alternatives to their investment strategy.

By Guy Avtalyon

Alternative investments, which have been used by large institutions and foundations for quite some time, have become more mainstream in the last years. They are more popular among individual investors. Also, there are more available products, which makes investing in alternatives possible for an increasing number of investors.

Alternative investments are a non-traditional approach to investing. They give the ability to invest in sectors and access to assets that traditional investments cannot provide. Investors should understand alternative investments as the potential to improve the overall risk-return ratio of your portfolio. Even a small allocation to alternatives may be reasonable and profitable now for more investors. Previously it wasn’t the case.

However, the non-traditional approach and structure of these investments bring with them unique risks of which investors must be aware of.

Alternative investments have a different approach

Alternative investments use a different approach to investing than do traditional equity or fixed-income investments.
This approach may require holding both long and short positions in securities. Also, it may require to hold private securities instead of publicly-traded investments. And there may be derivatives or hedging strategies as well. Also, investors that use alternatives have a goal to achieve a distinct level of total return. The other investors’ goal is the opposite, they usually pay more attention to relative performance versus an index.
Alternative investments have the potential to magnify the risk but also returns of an investment portfolio. They can possibly improve diversification and reduce risk. This approach is more flexible, investors have a chance to invest in a more extensive set of investments, so the possibility of enhancing returns is obvious.

Different risk

Alternative investments have risks different from traditional investments. They are less liquid, especially in periods of high pressure in the markets. Also, they are more complex and less transparent. These characteristics make it difficult for inexperienced investors to understand and they are more subject to investment manager failure.

The successful implementation of an alternative investment strategy relies largely on the investment manager’s experience and skill because of the wide range of investment opportunities.

Satellite asset classes as Alternative Investments

Satelite asset classes are very suitable for portfolio diversification. They cover everything that traditional investors and funds managers don’t even think about. They are more interested and specialized in asset classes such as real estate, commodities, any that can give high-yield fixed income. Satellites are non-traditional and have a low correlation with traditional assets. But their performances are driven by exposure which represents the similarity with traditional investments.

Types of Alternative Investments

We highlight several types of alternative investments but this list is more illustrative than exhaustive because new approaches are constantly being developed.

Private equity

Private equity is an investment strategy. Its goal is to take part in the growth of the private company. Hence, this strategy is long-term investments all in private securities generally and globally.
Private equity investment strategy covers illiquid asset classes with potentially greater long-term capital appreciation. The diversification doesn’t include public markets.
Only to higher-net-worth individuals use this strategy because it requires more investment experience, hence they are often accredited investor at high minimums and often has liquidity restrictions.

Hedge funds

The hedge funds are an alternative investment. They are designed to protect investment portfolios from market changes, so they will generate positive returns no matter if the markets are up or down.
They could protect the investment from market risk by adding alternative investments to the portfolios to decrease loss and protect capital.
The term “absolute return” is broadly used in connection with hedge funds. This explains how investment strategies are created to generate returns in any market condition. Actually, these funds are “hedging” the markets.

Managed Futures

An investment strategy that seeks to participate in trends in a large variety of global futures markets. Strategies include the use of the stock index, interest rate, currency, energy, and commodity futures. Many managed futures traders apply sophisticated software designed to invest in a disciplined, unemotional fashion, which often results in a lower correlation with traditional assets.

Alternative investments – mutual funds

These funds are not forced by traditional portfolio management systems. They have varying approaches, ranging from the absolute return, long/short equity, a broad mandate, or “go-anywhere” funds, and hedge fund-like strategies. Many of these funds also have a total return or an absolute return objective. They provide access to non-traditional investment. But they also provide investors daily liquidity at fair investment minimum.
Alternative investments can be useful tools to improve the risk-return of an investment portfolio. They can increase diversification and reduce volatility, given low correlations to more traditional investments.

Risks of Alternative Investments
- Higher fees. – Alternative investments can have higher fees. They may also charge additional management fees. While higher than traditional investments, these fees may or may not be excused when comparing returns net of fees.
- More complicated. – Alternative managers invest in a broad variety of investments, such as derivatives, and can use short selling. Understanding that can be difficult for many investors.
- Less transparent. – There can be limited to the underlying holdings of these investments. They use many tools that are not always the best choice for alternative investments. That makes a manager’s investment ability more difficult to assess. Also, some alternative investments are largely unregulated.
- Less liquid. – This is due to holding illiquid investments that can restrict the investor’s ability to offset money invested. For example, some hedge funds do not allow redemptions over the first year of investing. Most of them will allow annual or quarterly redemptions. Moreover, private equity may not allow redemptions for more than seven years. Here is also exposure to a notable lack of liquidity in some trading environments.
- Less tax-friendly. – Most alternative investment strategies aren’t focused on minimizing taxes.
- May disappoint in strong up markets. – They use short sellings to generate absolute returns. That may deter some investors.
- May not diversify risk in extreme down markets. – During the dislocation, the relationships of many different types of investments may increase notably. Investors hold that the more profits of alternatives is connected to the added risk.
Is this suitable for every investor?

Alternative investments can potentially magnify the overall risk-return of an investment portfolio. There are benefits but also risks in these non-traditional investment strategies. The most important is that investors have to be comfortable with alternatives when adding them to their investment strategy.
It is important also to discuss alternative investments with a respectable financial advisor. If you choose this strategy you’ll first need to determine how suitable it is in relation to your current investment approach.
5th October 2018
What is Diversified Investment
2 min read

Nothing more represents the term diversified investment than proverb “Don’t put all your eggs in one basket.” Instead, invest in many baskets and hold a substantially diversified portfolio based on your long-term asset allocation strategy.

A diversified investment is exactly that.

A diversified investment represents a portfolio of various assets that earn the highest return for the smallest risk. This kind of portfolio has a mixture of stocks, fixed income, and commodities. These assets react differently to the same economic occasions and because of that, diversification works. With diversified funds, you can access financial markets while spreading your investments across several asset classes and geographic regions. In this way, you reduce the impact of market fluctuations while maintaining an attractive potential performance.

In a diversified portfolio, the assets don’t match each other. When one rises, the other falls. It drops down overall risk because some asset classes will benefit, no matter what the economy does. They equalize any losses of the other assets. There is also less risk because it’s difficult the entire portfolio would be destroyed by any single event. A diversified portfolio is the best protection against a financial crisis.

How does Diversification work?

Stocks do well when the economy grows. Investors want the highest returns, so they bid up to the price of stocks. They are willing to accept a greater risk because they are optimistic about the future.

Bonds do well when the economy slows.

Investors are more interested in protecting their holdings. They are willing to accept lower returns for that reduction of risk.

The prices of commodities vary with supply and demand. Commodities include wheat, oil, and gold. For example, wheat prices would rise if there is a drought that limits supply. Oil prices would fall if there is additional supply. As a result, commodities don’t follow the phases of the business cycle as closely as stocks and bonds.

Diversification typically has low correlations to, or do not move in lockstep with, more traditional asset classes. As such, their inclusion in an investment portfolio tends to result in lower overall volatility. Because they have a wider universe in which to invest (public and private) and do not have some of the same investment constraints (can short and hedge), alternative investments have the potential for higher long-term performance than traditional investments.

Investing in diversified funds can, therefore, be an effective tool to:
- Seek growth in your savings with a medium-term outlook and moderate risk
- Benefit from exposure to several markets (equity, bonds) that is adjusted to match current conditions in order to both take advantage of market rallies and cushion against the impact of declines
- Manage your portfolio simply with access to turnkey management: the manager adjusts the make-up of your portfolio over time.
Where can you execute the diversified portfolio?

A diversified portfolio should contain securities from the following six asset classes.

Stocks. Different sized companies should be included. Company size is measured by its market capitalization. Therefore, include small-cap, mid-cap, and large-cap in any portfolio.

Fixed income. The safest are savings bonds. These are guaranteed by the government. Municipal bonds are also very safe. You can also buy short-term bond funds and money market funds that invest in these safe securities. Corporate bonds provide a higher return with greater risk. The highest returns and risk come with junk bonds.

Foreign stocks. These include companies from both developed and emerging markets. You can achieve greater diversification if you invest overseas. International investments can generate a higher return because emerging markets countries are growing faster. But they are riskier investments because these countries have fewer central bank safeguards in place, can be susceptible to political changes, and are less transparent.

Foreign fixed income. These include both corporate and government issues. They provide protection from a currency decline. They are safer than foreign stocks.

Commodities. This includes natural resources such as gold, oil, and real estate. Gold should be a part of any diversified investment because it’s the best hedge against a stock market crash. Research shows that gold prices rise dramatically for 15 days after the crash. This is why people invest in gold. Gold can be a good defense against inflation. It is also not correlated to assets such as stocks and bonds.

Maybe you should include the equity in your home in your diversification strategy.

If your equity goes up, you can sell other real estate investments in your portfolio. You might also consider to sell your home, take some profits, and move into a smaller house.

Most investment advisors don’t count the equity in your home as a real estate investment. They assume you will live there to the end of the time. They saw it as a consumable product, so that encouraged many homeowners to loan against the equity in their homes to buy consumable goods. When housing prices declined, they owed more than the house was worth. Many people walked away from their homes while others declared bankruptcy.

Expected return

Investors often focus too much on the expected return of their portfolio. While the expected return is important, you must also consider the amount of risk that you need to assume in order to achieve that expected return – the higher the expected return, the more risk you must take on to achieve it. When planning your investment strategy, it is important to be truthful with yourself in evaluating how much risk you can manage, and how long you are able to stay on the course through the ups and downs of the market rhythm. With other words, you should determine how much short-term volatility you are willing to accept.

A little bit of history.

An academic named Harry Markowitz introduced the research on what he called modern portfolio theory that people were able to understand diversification in an objective, mathematical sense. This research was so innovative and Markowitz earned a trip to Sweden to pick up a Nobel Prize.

The bottom line

In Shakespeare’s play, “The Merchant of Venice,” written more than 400 years ago, the character Antonio demonstrates his understanding of the concept. He says: “I thank my fortune for it – my ventures are not in one bottom trusted, nor to one place, nor is my whole estate upon the fortune of this present year.” That is a diversified investment.

Risk Disclosure (read carefully!)
3rd October 2018
Select Mutual Funds By Using Relevant Criteria

Examine fees and exit loads, read the offer document, analyze portfolio and holdings but here is a lot more.

By Guy Avtalyon

When starting to make the investment decision it’s important to know what criteria to use to know how to select the right mutual funds. If you don’t know anything regarding mutual funds and you are interested to invest in mutual funds, you are always confused about where to begin.

That’s the beauty of investing in mutual funds! You do not need to be an expert or even a finance freak to start investing in mutual funds.

One of the most frequent questions is how to select the right mutual funds to invest in.

Who manages mutual funds?

Mutual funds are managed by professional managers.

But not all funds are equally well. There are many funds that are not able to beat the index. That’s why it’s really important for you to select the right mutual funds that will fulfill your investment goals.

Most beginners just look at past performance while researching the best mutual funds to invest. But there are two equally important factors to be checked before selecting any fund: The objective of the fund matches your investment goals and what are the different risks associated with the fund.

Mutual fund investing is a long-term ratio. It’s different from the direct investment in stocks, where people can change the stocks fast, mutual funds are a long time task. Most people hold their funds for over 8 even over 10 years. Hence, it’s important that you choose the right fund and avoid ones that might result in you to lose both time and money.

How to select the right mutual funds?

I’ll show you, step by step.

Read the offer document: One of the most voluminous documents, also known as the prospectus. The first and the biggest step while choosing a mutual fund is to read the offer document. From the top to the bottom.

There you can find all the important details like the fund’s objective, scheme type, past performance, details about the asset management company, classes of the underlying assets, etc. It’s not difficult to understand these documents.

Match the goal of the fund with your own. Every mutual fund has a specific aim. And based on that aim, they decide different factors like asset allocation (equity to bond weight), risks, dividend payouts, tax benefits, theme/sector focus, etc.
You have to read the offer document of the fund in order to identify whether the fund aims to meet your investment needs. If their aims are not pertinent to you, it might not be the right option to invest in those funds.

Examine fees and exit loads. The mutual funds will charge a fee for their services and to meet different expenses. This expense ratio can be 2-2.5%. Some mutual funds may charge you a fee upfront when you invest (entry load), or a deferred sales charge when you sell your shares (exit load). As a value investor, you should stay away from mutual funds with high fees and loads to avoid unnecessary costs.

What criteria to use to know how to select a mutual fund?

Examine the past performance of the fund. The past performance of a fund isn’t a guarantee of how well it will perform in the future. But it will give you an approximate idea about the returns and expectations. You should compare the funds’ past performance to the benchmark because it will give you a better idea of its actual performance. Stay focused on long-term performance (3 years or greater) and compare it with its competitors and index.

What else can you do?

Analyze portfolio and holdings. This may be a little tricky for new investors. The main question is how will you understand whether the holdings are good or bad? The key point is to make sure that the fund is investing in the type of securities in which you are interested. Analyzing the portfolio will give you a good idea if the fund is the right fit for you or not. There is also another trouble while analyzing the portfolio and holding. The portfolio can be changed from time to time. The manager may choose to buy or sell securities because the managers are independent. And if you are not regularly reviewing the fund, the current allocation might be a little different from the time when you invested in the fund. That’s why you should always review your fund every six months after purchasing to confirm that fund achieves your goals.

Check your fund manager. The fund manager is the one who makes all the major buy/sell choices on your behalf. That’s why you have to find out more about the fund manager. Find how long this fund manager is handling the fund. Check if the fund manager has other funds for managing. If the other funds are also doing alike good, then it is a good sign. But if just one fund is performing well, while the other funds are struggling, then it might be a problem.

Check the credentials of the fund house. You do not want to get involved with a troublesome fund house which might bring you problems.

The procedure to select the right mutual funds to invest requires a careful study of the fund. To whom you can trust? Better make your own decisions based on examinations.

And a very important note: Do not rush with investing. There are hundreds of mutual funds in the market. Take your time to analyze them and find out the one that best suits your goals.

Happy Investing!

1st October 2018
Investing In Crypto – How To Prepare For It?

2 min read

According to the study conducted by London-based investment firm IW Capital, reveals that only five percent of British crypto investors realize a profit. But only 38% of the general population has any understanding of cryptocurrency or the underlying technology.

The data reveals that, fundamentally, Brits do not have enough information or knowledge on the topic of investing in crypto. In fact, many have no knowledge about the subject whatsoever.

Despite a widespread dearth of knowledge surrounding this particular asset class, disconcertingly facts appeared. One in 20 Brits – nearly 3 million – have invested in cryptocurrency without fully understanding it. Only 5 percent have taken advice from a financial adviser when investing in cryptocurrencies.

Crypto is unpredictable

As promising as crypto can be, however, it’s also been labeled one of the riskiest investments of 2018.

It simply crypto seems to be unpredictable.

We will show you how to be prepared for investing in crypto on the example of bitcoin, the most popular and largest one.

Some believe bitcoin was a bubble that has burst and is now fading away slowly, and others think it’s going to run to new highs.

Yes, bitcoin is risky, but it is still a popular investment option.

Should you be considering this risk these are some of the things you can do to prepare.

If you try to figure out what exactly influences bitcoin’s price for years now, the answers are not immediately obvious.
Bitcoin is global, decentralized, and unbound by sweeping restrictions. It can develop in different ways in different places. That said, some factors that influence the price have become clearer over time, and government regulations are at the top of the list.

Government rulings that affect the trade of bitcoin can by extension affect the price immediately. Imagine that all governments suddenly made it illegal to deal in cryptocurrency (some already did it). This would in a minute remove a massive market, reducing demand for a short time.

Everyone should follow regulatory news.

What is unclear about investing in crypto for the majority

Those who learn why it’s useful, and where its value comes from, can be a little bit puzzled by exchanges. There are a lot of them out there. They handle bitcoin transactions in different ways, with different fees, different acceptable payment methods. And varying selections of additional cryptocurrencies that can be handled. That’s why investing in crypto can be unclear for the majority.

However, it’s still worth keeping an eye on. Because changes in exchanges can also impact the price simply by making bitcoin more accessible. Or, in some cases, by increasing visibility for competitors.

For example, the positive effect would be if a major new exchange emerged for bitcoin, or an existing service started facilitating bitcoin purchases. But the negative effect could come about if an existing exchange. With a broad user base announced that it would begin supporting a cheaper alternative to bitcoin.

The more bitcoin is accepted as payment, the more demand there will be for it.

Last year has been bitcoin’s emergence as a widely trusted payment method for online casinos. They do a great deal of business internationally.

Many platforms started looking for more secure and anonymous ways of accepting money, and bitcoin-only casinos started to emerge. A major shift like this can give millions of people a new incentive to use bitcoin. You should keep an eye out for these types of stories.

Crypto volatility

Although crypto might offer more volatility than most, the crypto market landscape shares fundamental characteristics with other investment markets.

For example, the figures of losses are not wildly different from Forex, where new traders would often be better off flipping a coin or the stock market, where, according to science, 95% of all traders fail.

Amateur trading and investing have led to countless tales of monetary losses. Most derive from the human capacity to make decisions based on emotions. Rather than research or tried-and-tested methods.

In both, the trading and investment worlds, this story plays out time and time again, making the profitable trader a statistical anomaly. And leading the average individual investor to underperform the market index by 1.5 percent.

So, where the problem is? In lack of education.

What can you do?

You need to make sure that you’re in the right financial situation before you start investing in any asset or commodity.
If you’re in a position where you’re still paying off any debts your money would be better invested in a savings account rather than in cryptocurrencies.

However, if you have substantial savings account on hand, you may find yourself in a much better position to be able to invest in this volatile, but forever exciting, commodity.

But, before you ever place down the first cash sum, you must understand what cryptocurrencies are, how they work and how their market typically behaves. You have to understand what Blockchain is, how it works and, where possible. And how some country’s sudden ban or adoption of any cryptocurrency can affect the entire market.

And practice.

There are plenty of platforms and brokers who will offer you a free practice account, without risking any of your own money. This way, you can get a much better feel for what you will be doing with your own funds.

More about how to pick a good platform you may find here.

An unfortunate fact of the industry is that cryptocurrencies are volatile. Prices for any cryptocurrency can rise and fall at incredibly fast rates. Provide a monetary shock absorber to ensure you don’t land in financial trouble.

But whatever you do, be prepared for potential disappointment if the market begins to crash. On that way, trading and investing in cryptocurrencies will be much easier to handle.

With the right platform, with the understanding of just what to expect from cryptocurrencies and a good personal financial situation, you can try your hand at investing in cryptocurrencies with limited risk.

Risk Disclosure (read carefully!)

29th September 2018
What is Mutual Fund Investment?

Can mutual funds give you better returns, are they safer investment choice, what are types of mutual funds? Read all here.

By Guy Avtalyon

A mutual fund is a company that puts together money from many people and invests it in stocks, bonds, or other assets. The investment portfolio of a mutual fund is a combination of stocks, bonds, and other assets. When an investor acquires shares of the fund becomes the owner of the part of these holdings.

Mutual funds investment can give you a better return in a much safer way

The performance of mutual funds depends mainly on the fund manager who manages the fund on your behalf. Making the decision based on knowledge, picking a well-performing fund manager is utterly important to your success. For all of that, you should need some basic information on mutual fund investment.

OK, you own the mutual funds comprising a collection of stocks and bonds. That is your upper hand.

Why? First of all, it allows you to buy in with notably less money than it would take to purchase the same portfolio of stocks/bonds on your own. Second, you spread the risks out there among a group of investors if something goes wrong.

How the mutual fund portfolio is structured

It isn’t one single stock or bond of one sector alone. Therefore you can reduce your risks of losing your money to a greater extent. Always keep in mind that you may be the worst loser in the stock market due to a periodical deep cut in share prices. True is, there is no full-proof method or strategy that is completely safe and without risks. That’s the fact. But, mutual funds have lower risks than many other investment options. This makes them suitable for novices, traders who lack proper knowledge and skills in the investment market.

Mutual funds often have much better rates of return than the average savings account at the local bank.

Besides that, you may have minimum risks in this type of investment compared to other more risky ventures.

Even more, if you have some idea of which sectors are performing well, you are at an advantageous position of choosing a good sectoral fund. But be cautious, you should select a well-rated company. Diversification is the key to a healthy portfolio and mutual funds will help you get a diversified portfolio.

This is one of the safest ways to invest your money in the long term if you are young enough and in no hurry for retirement because the most mutual funds do not have the high payoffs that many investors seek to include for their retirement planning.

What are the main types of mutual funds?

Essentially, there are three types of mutual funds with some variations on each:

Money market mutual funds are an open-ended mutual fund. These types of funds invest in short-term debt securities. This is regarded as safe as bank deposits yet providing a higher yield. These funds are great for long-term investors. This slow and stable access to investing is better than leaving your money in an interest-paying savings account.

Equity funds that may provide slow growth over time with some income along the way.

Fixed income funds are created to provide a current income. This is great for those who have retired or for investors who are extremely conservative.

Besides this, you need to have certain basic knowledge about diversifying your portfolio of rated mutual funds. That can give you an attractive return with the highest safety. In a roar bull market, investing in Diversified Equity Fund is the best option (60% of the total fund), then comes Balanced Fund (20%), followed by Midcap Fund (10%), Small-cap Fund (5%) and Liquid Fund (5%). If you’re a conservative trader, you may opt-in Debt Fund. But if you’re optimistic, you can go for index funds as a systematic investment plan. Index Fund can deliver you a very profitable return in a bull market. Why? Because index fund includes highly rated performing stocks with diversified sectors and reliable.

One of the benefits of investing in a mutual fund is that offers professional investment management and potential diversification

Ways to earn money by investing in a mutual fund:

Dividend Payments. A fund earns income from dividends on stock or interest on bonds. The fund pays the shareholders almost all the income, lower for expenses.

Capital Gains Distributions. The price of the securities in a fund may grow. By selling a security that has increased in price, the fund has a capital gain. At the end of the year, the fund shares the capital gains, lessen by any capital losses, to investors.

Increased NAV. When the market value of a fund’s portfolio rises, the value of the fund and its shares increases also. If the NAV is higher the value of shareholders’ investments will be higher too. NAV is calculated by adding up the current value of all the stocks, bonds, and other securities, including cash, in its portfolio. Then, subtract the manager’s salary and other expenses, and then divide that result by the fund’s total number of shares.

All funds carry some level of risk. It is possible to lose some or all of the money you invest. The reason is obvious, the mutual fund holds securities that can decrease in value. Dividends or interest payments are also changing along with changes in market conditions.

A fund’s past performance is not important because past performance does not predict future returns. But past performance will never tell anything about the future performances but can tell you how volatile or stable a fund has been in the past. If you find a fund had more volatility, that is a sign that there are higher investment risks.

Every mutual fund must file a prospectus and regular shareholder reports, that’s by the law. Read the prospectus and the shareholder reports before you invest. Also, the investment portfolios of mutual funds are managed by investment advisers. You should always check that the investment adviser is registered before investing.

28th September 2018
How To Choose An Asset To Invest In
You don’t need to be an excellent asset picker to build your wealth. Just avoid get-rich-quickly schemes.

By Guy Avtalyon

How to choose an asset? Don’t pick only one, or form the same asset class, mix them.

The main asset classes are:
1. a) Shares/stocks (also known as equities).
2. b) Bonds (also known as fixed-interest stocks or debt).
3. c) Property.
4. d) Commodities.
5. e) Cash and cash equivalents.
What are the best assets to invest in?

(the return criteria is based off trying to generate $10,000 a year in passive income)
1) Certificates of Deposit (CDs).
2) Fixed Income / Bonds.
3) Physical Real Estate.
4) Peer-to-Peer Lending (P2P)
5) Dividend Investing.
6) Private Equity Investing.
7) Creating Your Own Products.
8) Real Estate Crowdsourcing.

Decide which asset to invest among these

Let’s say like this, investing is about laying out money today expecting to get more money back in the future. This is best achieved by acquiring productive assets. Productive assets are investments that internally throw off surplus money from some sort of activity. To be clear, if you buy a painting, it isn’t a productive asset. After 200 years you’ll still own the painting, which may or may not be worth more or less money. But, if you buy an apartment building you’ll not only have the building but all of the cash it produced from rent over that century.

How to choose an asset suitable for you?

First of all, never invest all your money into one asset. You should mix them. The right asset mix should help balance risk with your expected rate of return on your investments, fit your tolerance for risk, let you get your money when you need it, help provide the growth you need to reach your goals, and change as your needs and goals change over time. When you know all of these you’ll know how to choose an asset to invest in.
- Shares (also known as equities) – Shares are bought through a stockbroker. The easiest way to buy or sell shares is through an online broker. Some execution-only is maybe the best choice. Execution-only indicates the broker will take your order and execute it without giving you any advice. Many execution-only brokers provide lots of information and research about shares but this does not include advice. So, if you want to use some service like this one you’ll have to take full responsibility for your investment. If you do need advice you’ll have to find a stockbroker offering either an advisory or discretionary service. With a discretionary service, you authorize the broker to buy and sell shares on your behalf, but you’ll have to pre-arrange the limits. If you choose an advisory service, the broker will need your permission before taking any action regarding your trade.
- Bonds (also known as fixed-interest stocks). These represent a form of IOU issued by governments and companies when they want to borrow money from investors. They pay a fixed level of interest, with higher-risk borrowers paying more in interest than lower-risk borrowers.
- Property. The property has a good record in providing a financial return that beats inflation, no matter residential or commercial it is. As an investor, you can buy shares in property development or real estate investment companies. Also, you can buy real ‘bricks and mortar’. Funds generally focus on commercial property, but some buy into the residential property as well.
- Commodities. You can find a huge variety of commodities traded on global markets: oil and gas; precious metals such as gold and silver; industrial metals such as copper and iron; and ‘soft’ agricultural commodities such as wheat, rice, and soya. It is almost the same as shares and bonds. Commodity prices can rise and fall in answer to supply and demand
- Cash. It may be a bit strange that cash is considered to be an asset class because the whole reason for investing in the first place is to grow your money faster than if it was left in the bank. But you must have in your mind that cash provides a useful benchmark for all the investment. Finally, investments that don’t beat cash have failed. Cash also provides a safe shelter for funds when markets are bumpy or overvalued. For example, some funds trade in currencies to increase their returns from cash in periods the interest rates are low.
  Being a skillful asset picker isn’t actually necessary to grow your capital. Many people get in trouble particularly when they think of investing as a way to get rich quickly.
Your path to success as an investor or trader is not likely to hinge on whatever hot stock your friend thinks you should buy ASAP. Your success depends more on how smart a portfolio you put together, as well as how you progressively modify or rebalance it over time. And also, knowing how to choose an asset that will generate you nice returns.

Well, how do you invest intelligently, if slowly? You have to respect some basic principles.

Why do you want to start investing?

The main argument for putting your money in anything is to avoid losing your wealth during inflation. In your checking account, cash will still be there in 40 years, if you don’t touch any of it. But you won’t be able to buy anything.

Other crucial reasons might include growing substantial enough savings for retirement and earn enough cash for buying a home. For those kinds of goals, you might want assets with higher returns and therefore you’ll have to take on higher risk.

Also, the very important question is when should you begin investing?

You might already know, but you need to be investing in old age. If you start investing in your early ages you will have many advantages as an investor. Just to name a two: you have more time for your money to grow and more time for market downturns to correct themselves.

How to choose an asset?

Each type of productive asset has its own characteristics and pros and cons. Here is a quick rundown of some of the potential investments you might make as you start your journey:

Business Equity – If you own equity in a business, you are qualified to a share of the profit or losses caused by a company’s activity. Whether you are acquiring a small business completely or buying shares through the purchase of stock on the stock market. Business equity has historically been the most rewarding asset class for investors. It is wise to observe that a good business is a gift that keeps on giving.

Fixed Income Securities – When you buy fixed-income security, you are really lending money to the bond issuer in exchange for interest income. There are billions of ways you can do it, from buying certificates of deposit and money markets to corporate bonds, tax-free municipal bonds, etc.

Real Estate – This is maybe the oldest and most easily understood asset class that you as investors may think about. There are several ways to make money investing in real estate but it typically comes with developing a property and selling it for a profit or owning something and letting others use it in exchange for rent.

Intangible Property and Rights – When it is done properly you can create things out of the air that goes on to print money for you. Adorable! Intangible property includes everything from trademarks and patents to music royalties and copyrights.

Farmland or Other Commodity-Producing Goods – It often involves real estate. Investments in commodity-producing activities are fundamentally different in that you are either producing or extracting something from the ground or nature for what you hope is a profit. For instance, if oil is discovered on your land, you can extract it and earn money from the sales. If you grow wheat, you can sell it and earn cash under any weather. But the risks are remarkable: hail, flood, drought can and have caused folks to go bankrupt by investing in this asset class. But also it can make big rewards.

That is exactly how to choose an asset to invest in.
26th September 2018