What is “Investing”?:
Investing in a nutshell is putting your money to generate more money/income over time without having to do anything. Investing is not the same as saving where you purchase things called “assets” with the expectation that they will increase in value over time. These assets can range from anywhere starting with stocks, bonds, real estate, mutual funds, etc, just to name a few simpler ones. The idea and concept of investing come with its risk and return. This is the trade-off with the fact of money multiplying in trading.
How to start?:
Investing in general is not super complicated and doesn’t require a huge amount of info to get started, The First thing is to always figure out your end goal with investing and what you would like to do. Creating your budget and ensuring that investing is only a side “hustle” that can be added to your assets is another important thing to remember. This allows you to not worry about investing too much so that money comes in every once in a while, aka passive income. You can then set up an investment account and start selecting the assets you want to invest in.
Exploring your options:
There are many options/”assets” you can choose to invest in. One of which stated above was stocks, which I believe to be the most common one people tend to invest in. Stocks are parts of a company that you can own. They have a huge potential return if the value increases over the years but with high return, comes high risk as well. On the flip side, there are also bonds, which are loans to governments or corporations. They offer low returns but come with little to no risk. You can also invest in the physical world, such as buying goods like gold, oil, and other products can give you a return on your investment as well due to inflation.
Expanding your portfolio:
I believe this part of expanding your portfolio is one of the most important steps in investing if not the most important. This allows you to have a wide range of assets in your portfolio which can help many things. One of the things for example can be if one of your assets does a downturn with its value, it won’t significantly damage your portfolio because you have a wide range and can still keep your profits.
---------------------------------------------------------------------------------------------------------------------------
Sources:
Chen, James. “Investing for Beginners: A Guide to Assets.” Investopedia, 2019, www.investopedia.com/articles/basics/11/3-s-simple-investing.asp.
Blume, Matthew. “Making Smart Investments: A Beginner’s Guide.” Harvard Business Review, 26 Aug. 2021, hbr.org/2021/08/how-to-make-smart-investments-a-beginners-guide.
Morgan, J. P. “How to Assess the Potential Impact of AI on Your Portfolio | J.P. Morgan.” Jpmorgan.com, J.P. Morgan, 2 Aug. 2024, https://www.jpmorgan.com/insights/investing/investment-trends/how-to-assess-the-potential-impact-of-ai-on-your-portfolio.
Commentaires