It is never too late or too soon to begin investing. You can learn how to invest in things like real estate, index funds, mutual funds, bonds, stocks, Bitcoin, and more. How do you decide what to invest in though? The answer is simple – you research the options. Let’s take a peek at a few of them so that you can get a basic introduction to some of the options for investing.
This option is one that is relatively new, as it has been around for less than a decade. Bitcoin is a cryptocurrency, or one that is virtual. When it was invented, it was limited at only 21 million to ever be produced. As of June 2017, more than 16 million have been found – which means that there are a little less than 5 million left to be located. The age old idea of supply and demand tells us that the limitation should mean that it has good value. Every bitcoin is worth over $2,000 as of June 2017. How do you get them though?
Bitcoins can be bought outright or mined with a service like Genesis Mining. It might be easier to buy them, but it will cost you more, meaning that you won’t get as good of an ROI (return on Investment) as you would by mining them. While Bitcoin has a bit of risk involved (as do all investments), it is one that pays off if you do it right.
If you want to learn more about mining bitcoins, or any other type of investing, a great strategy for learning to invest is to take an investment class or two. These are available both on and offline, and can teach you all about setting up your portfolio, the workings of the market, and how you might be able to avoid some of the more common mistakes made when investing. These classes typically use theoretical portfolios and let you practice by utilizing a fake trading platform.
Many people choose to invest in stocks. Purchasing shares of stock means that you have a portion of ownership of the company the stocks are for, and you have the chance to take part in the success of the business through increases in the price of the stocks and any dividends that the business might declare. In other words, shareholders, or stock holders if you will, have an actual claim to a portion of the assets of the company.
If you hold common stock, you will have the right to vote at the shareholder meetings and can receive any dividends that are declared. If you hold preferred stock, you won’t have any right to vote, but you will receive preference when it comes to dividends being paid out. You will also have a better claim on the assets of the company than those who hold common stock.
Bonds are actually instruments of debt. In essence they represent the loaning of funds to an agency or company in exchange for interest payments and the return of the principle when a date of maturity has been reached. Bonds can be issued by governmental agencies, municipalities, and corporations. Bonds can be bought as a new offering or from the secondary market, just as it is with stocks. The value of a bond may rise or fall and this can be based on many things. The most important of these is has to do with the rates of interest the bonds were issued at versus current rates of other long term investments. Bond prices tend to fluctuate inversely depending on the rates of interest.
Mutual funds are a type of pooled vehicle for investment. They are managed by a person called an investment manager who allows for the money of the investors to be invested in bonds, stocks, or even other investment vehicles as will be stated in the prospectus of the fund. Mutual funds get valued at the end of each trading day and if there are to be any transactions that sell or buy, these are also done after the close of the market day. When it comes to having a diverse portfolio, mutual funds are a great way to do this.
The information you have just read should give you a basic overview of some of the more common investing options. Do your research and learn all that you can about your options before you venture into the world of investing.