Investing your money? An investment option to consider

The world we live in revolves around decisions that have been made by people, institutions, and governments concerning the management of money.

Simply put, money is what makes the world go around, it is what we work for, and it defines wealth.

So it shouldn’t come as a surprise to know that we all have doubts about what we should do with our money. Voices in our head may be telling us to save it, splurge and buy a new car, remodel the house, or donate it to charity. At the end of the day what people do with their money is their own business.

But, what about those who want to see their money grow? Those who aren’t satisfied with the annual interest rates that banks are offering, who don’t have (or see) the need to spend on material items, those who want to invest their money and see it grow?

Before people make the decision to invest money I’d like to make a very clear point. As opposed to saving the money in a bank or buying a new car, when you invest your money you never quite know what you’re getting.

There is a certain level of risk in virtually every investment. Why am I saying this? Because, the world is an unpredictable, dynamic, and ever-changing environment that can affect investments in a second. And you should be aware of this before making the decision to invest.

For those unfamiliar with what an investment actually is (in a financial sense) it is an asset or item that is bought with the hope that it will generate future income or increase in value.

Growing a money tree

Therefore, when people buy an “investment” they are psychologically viewing the asset as a source of potential capital gain. In a nutshell people investing their money want to generate as much income as they can.

One of the most well known and successful investors of all time is Warren Buffett. He has provided some excellent advice about what a good investment strategy is, repeatedly advising investors not to put all their eggs in one basket – you should spread your investments.

The logic behind this is that by broadening your investment portfolio (the number of assets/items you’ve invested in) the better you will be able to absorb losses of the investments that go horribly wrong.

Another word of advice that I think every investor should remember is that the “best” investment strategies tend to be long term and that deciding what assets to invest in requires due diligence.

There are literally thousands of investment options and including all of them in this article would take forever. However, I will include what I believe to be one of the most lucrative (and somewhat low risk) option out there.

Buy shares in multiple blue chip companies for the long term

If you take a look at how the Dow Jones Industrial Average has performed over the past century you will quickly notice how its gone up. You will also notice that (despite the long term trend of going up) there are also periods where it has gone down.

This phenomenon of stock prices going up and down is simply part of the business cycle.

However, this doesn’t mean that all companies will be able to ride the waves – evidently some will fall.

So, given that the stock markets are generally bullish (increasing in value), with occasional dips (that can severely affect some companies), what is the safest thing to do?

Invest in multiple “blue chip” companies that are very well established (increasing the likelihood of it surviving rough patches) for the long term. There will be periods where you’ll see the price fall, but don’t pull out to “cut your losses”, hold on and wait it out, it may be worth it.

You may find the articles below of interest too:

Investing in silver – this article provides general advice about investing in silver.

Investing in gold – gold prices soared for years, then suddenly dropped. Is it a safe investment? Some would argue no, find out why.

Investing in stocks – a good idea? – read this article for a more detailed look into investing in the stock market and the risks involved.


 

Leave A Reply

Your email address will not be published.