The issue of how to invest, where to invest, when to invest and how much to invest has been bordering many investors including analysts for ages. Having $10,000 or more to invest in 2011 and beyond profitably is highly achievable and simple as well. In order to make this a reality taking into consideration the economic and political environment across the globe, planning is key.
The first approach for success is to know where to invest. To make this appropriate, diversification should be the pillar. This is because it is not advisable to put all your $10,000 and more into only one stream of investment. Spreading your $10,000 or more among different assets such as money market instruments, bonds, stocks, and real estate is ideal. It is highly impossible for all of these assets to lose excessive value simultaneously.
Money market instruments such as fixed deposits and treasury bills are less risky, hence lower returns comparatively. They provide the investor with ready access. Bonds have higher interest rate but highly affected by interest rate fluctuations. When interest rate goes up, bond prices incidentally falls. It is there reasonable to invest in medium term bonds to lower the effects of interest rate movements in the near future. Equity funds are very volatile but can give an investor who has $10,000 or more to invest an outstanding return when companies are carefully selected. Here, companies with international presence are recommended so as to reduce systematic risk. A well diversified portfolio that includes real estate equities is also encouraged.
The second approach is to know how much or how to invest your $10,000 or more profitably. This decision is very much dependent on the risk tolerance level of the investors. Some investors are risk loving, neutral and averse. So your attitude towards risk should be the motivating factor to help you in making the right decision. If you consider yourself a risk loving or aggressive investor then invest about 60% of your funds in the stock funds including other volatile funds and 40% in the money market and bond funds. However, if you are risk averse, then invest 40% in more risky and volatile funds and 60% in the less risky or less volatile funds.
In 2011 and beyond, knowing where to invest and how to invest a $10,000 or more especially in a well diversified portfolio is the gate way to financial freedom. The years ahead looks brighter amidst the socio-economic challenges but can only be rewarding for investors and analysts who can plan, and adapt to changes and approaches as described above.
The first approach for success is to know where to invest. To make this appropriate, diversification should be the pillar. This is because it is not advisable to put all your $10,000 and more into only one stream of investment. Spreading your $10,000 or more among different assets such as money market instruments, bonds, stocks, and real estate is ideal. It is highly impossible for all of these assets to lose excessive value simultaneously.
Money market instruments such as fixed deposits and treasury bills are less risky, hence lower returns comparatively. They provide the investor with ready access. Bonds have higher interest rate but highly affected by interest rate fluctuations. When interest rate goes up, bond prices incidentally falls. It is there reasonable to invest in medium term bonds to lower the effects of interest rate movements in the near future. Equity funds are very volatile but can give an investor who has $10,000 or more to invest an outstanding return when companies are carefully selected. Here, companies with international presence are recommended so as to reduce systematic risk. A well diversified portfolio that includes real estate equities is also encouraged.
The second approach is to know how much or how to invest your $10,000 or more profitably. This decision is very much dependent on the risk tolerance level of the investors. Some investors are risk loving, neutral and averse. So your attitude towards risk should be the motivating factor to help you in making the right decision. If you consider yourself a risk loving or aggressive investor then invest about 60% of your funds in the stock funds including other volatile funds and 40% in the money market and bond funds. However, if you are risk averse, then invest 40% in more risky and volatile funds and 60% in the less risky or less volatile funds.
In 2011 and beyond, knowing where to invest and how to invest a $10,000 or more especially in a well diversified portfolio is the gate way to financial freedom. The years ahead looks brighter amidst the socio-economic challenges but can only be rewarding for investors and analysts who can plan, and adapt to changes and approaches as described above.
A well strategized portfolio will definitely lead an investor to making a lot of money. Having multiple sources of income is also key to sustainable cash inflows. Experienced merchants have come out with free downloadable e-books - step by step approach- to help you make your dream of becoming a millionaire a quick one. Check here for your free copy http://www.make-goodmoney-fast.com.
The author Isaac Akohene-Asiedu is a lecturer in Finance and Statistics and a microfinance prodigy. He is a practical investment adviser and an entrepreneur with many years of investment experience. He likes to share investment tips with people who want to earn financial freedom.
The author Isaac Akohene-Asiedu is a lecturer in Finance and Statistics and a microfinance prodigy. He is a practical investment adviser and an entrepreneur with many years of investment experience. He likes to share investment tips with people who want to earn financial freedom.
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