Any economic activity is a strategic process, and it is only possible to remain a winner with good planning. That is why every investor needs to analyze the economic indicators of the world’s largest economies in detail. Financing for small and medium-sized businesses, as well as for innovative sectors of the economy, can help correct this situation. So today, we’ll tell you what kinds of investments you can make and where you can allocate your capital.
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Investing In The Crisis
The beginning of 2022 has not been an easy year. Numerous destabilizing factors have significantly rolled back the global economy accumulated in recent years.
The crisis demonstrated how unsustainable traditional assets could be. Even those considered the safest ones did not justify the entrusted hopes.
Thus, despite the declared guarantees, bank deposits turned out to be less reliable than they seemed before. Moreover, rapidly growing inflation, high risk of ruble default, and low rates of return on investment (ROI) are a reason to think about other ways to preserve and increase capital.
More often than not, people continue to invest their money in a bank simply because it is understandable and accessible to almost everyone. However, at the same time, the average yield from such investments is 5-10% per year, which is incredibly low and does not even cover inflation.
Among the disadvantages are fixing interest when making a deposit and long investment periods without the ability to withdraw even part of the deposit.
Investing in real estate is considered a good investment. Under normal conditions, buying a real estate investor provides a stable source of income of 10-20% per annum. But not under crisis conditions.
Today, most options have become uneconomical and require at least five years to pay off. Over such a long time, the market situation can change dramatically, which results in additional risks.
Among other types of investing, automatic trading algorithms are the most interesting. Such robots allow for 30-80% returns, even for novice traders. However, there is always a chance of running into a crooked algorithm that can lead to the loss of the deposit.
In addition, programs are not yet capable of deep analysis of the market situation as opposed to a human, which should always be considered. Therefore, it is advisable to have several trading robots to trade in different markets and strategies.
The market is very volatile, so do not trust this tool with large sums of money; it is better to look for competent traders and give them part of your money for management, it is called copy-trading, and there are separate platforms for this purpose.
ETFs, or Exchange Traded Funds, are exchange-traded investment funds. ETFs allow investing in a multitude of companies that are included in a particular index fund. Working through a broker, an investor reduces risks using broad diversification. Such investments can yield 10-30% per annum.
ETFs are much easier and cheaper than manual investments in companies since a broker takes care of all the complications. However, as with any other securities, index funds are associated with the risk of losing some of the invested funds.
One of the most highly profitable and, at the same time, risky ways to earn an income is to invest in small and medium businesses. Once the business processes are established, there comes the stage of scaling up the enterprise.
Investing money in business development, the investor with a detailed analysis can expect a high ROI and income in the region of 30-50% per annum. At the same time, a lack of experience can lead to a wrong decision and investment loss.
Crowdfunding platforms make it possible to invest in small businesses with a minimum of effort and provide guarantees of the safety of funds through a preliminary audit and an agreement with the company.
An IPO, or initial public offering, allows a business to raise funds by selling its stock. By buying such shares, the investor becomes a shareholder and can earn a return of 40-150%. The main advantage of an IPO is the opportunity to buy a company’s shares before they go public.
However, their price may collapse after the company’s shares are listed on the stock exchange. So to reduce risks, the business in which money is invested should be carefully analyzed.
Another plus is that you can’t buy shares of one company with all the money you have, it’s called allocation, and it allows you to spread the money evenly to purchase the securities.
You will also need to open a brokerage account and deposit a minimum of $2,000 to participate in a public offering or join our investor pool.
In recent years, cryptocurrencies have created a tangible furor in finance. It is due not only to incredibly high yields (an average of 30-150%) but also to the revaluation of the financial system as a whole.
As a result, an investor can buy a cryptocurrency and keep it until it grows in value or try to make money by trading it on the exchange.
It is worth keeping in mind that cryptocurrency is still a very volatile asset, and there has often been a drop in the price of 99% of some initially promising coins. Therefore, it requires being on trend and conducting comprehensive project analytics.
One way to make money from cryptocurrency is through stealing. Modern consensus algorithms offer holders of some crypto-assets to earn income for locking funds in their accounts. Staking returns range from 10-30%. It is often enough to buy a cryptocurrency to start earning revenue.
Again, the volatility of this asset class is relatively high, and therefore its depreciation can lead to a loss of investment.
Venture Capital Investments
Investing in startups is at the top regarding returns, although it is the riskiest type of investment. But, with luck, you can earn hundreds or even thousands of percent of your initial investment.
But the problem is that the criteria by which the success of a traditional business is judged are not appropriate for evaluating startups. That is, high scores correlate practically nothing with successful startups.
In addition, it is worth noting that such investments imply a long expectation of return on investment, usually from 1 to 3 years.
As you can see, passive income is not limited to a bank deposit, but a stable income requires relevant analytics, strategy, and discipline.