Investment is an activity where the person decides to purchase some financial Instrument or assets with an expectation of increase in its value.
There can be two types of Investments based on the period of money to be invested. They are Long term and short term Investments.
Investments can also be further classified as High risk, Medium risk and low Risk investments based upon the nature of the asset opted for the investment where value of the investment fluctuates based on various external factors.
Investment can be understood as an activity where the money is made to earn more money for you without you being physically and instead money will be earning for you.
It is the need of the present period that everyone need to plan for the future through systematic investments. Investment is also done to ensure that the future commitments are met without failure. It is carried out be setting out of the excess income or a part of the existing income by purchasing either some financial instrument which can give return within some timeframe or any asset with an assumption of it growing in value after some time.
Avenues for Investing
The Investment can be done either in the financial instruments such as Gold, Silver , foreign exchange(forex),bonds, mutual funds, fixed Deposits etc. Some of the assets used for investments are Land, shares, stocks etc.
Generally Investing is done with a purpose which is either a future need or for unforeseen challenges in future. It requires proper planning and thoughtful exercise. It is not one solution for all as it varies with the need of the person and as to be carefully tailor made by each person based on their investment needs.
Risk and Investment
Based on the Risk Tolerance levels of the Investor the investments can be spread into high Risk, Medium risk and low Risk Investments as it is the basis rule of Investment – More Risk More returns. A proper mix of all types of investments helps in maximizing the return and reducing the Risks of the Investments.
Gold – It is a very popular investment however its movement is found to be having some correlation with the oil hence when economy goes down, gold tend to go low and vice versa.
Silver –Very volatile by nature and can show heavy fluctuations sometimes. Its movement is like stocks in the stock market.
Foreign exchange – Its volatility depends on the economy of the base country hence currency like US Dollar is found to be more stable then the developing countries.
Investment is not a magic science and there are very same and secured instruments for investment that can be opted by any person with a little knowledge on the financial instruments. It is always advisable to acquire proper knowledge of the option opted for investment along with the risks involved before going ahead with any investments – Loan Places Near Me