Investing is something that takes discipline and focus, but most of all it takes a strict strategy that you adhere to in order to make sure your reach your desired goals as soon as possible.
Anyone who has invested for any length of time will tell you that it takes time and practice and that there will be trial and error and commitment needed to reach your level of comfort, and gain a complete understanding of the investment you want to master.
Out of all the investments available from real estate, to existing and new businesses, to the stock market, they generally fit into three catagories:
- Investments that are low risk and produce low returns – They include government, bonds, certificates of deposit (CDs), savings bonds and fixed and indexed annuities. These investments pay out a lower but safer return, tend to take time to generate a return, and require the investor to commit that time or face an early withdrawal financial penalty.
- Investments that are moderate risk and produce moderate returns – They include existing businesses, real estate, corporate bonds, conservative mutual funds and blue chip stocks. These investments have a great chance to pay off, and the payoff is typically a better return than low risk investments and are more liquid, but these risk is higher.
- Investments that are higher risk and produce higher returns – They include options trading, new companies, and hedge funds. These investments carry the highest degree of risk and typically an investor can lose some or all of his money quickly. They typically pay the highest returns however.
High Risk / High Return Investments
Options Trading – Options trading can be very complex with a multitude of factors determining when and how to get into and out of the market. Options are a derivative of trading stocks on the stock market. Instead you purchase contracts that contain the underlying stock, and choose whether the stock will go up or down within a specified period of time. If you choose correctly, you make a profit.
Today there is software that simplifies options trading making it available to the less sophisticated investor. It still remains difficult at times to manage an account.
A simpler form of options trading called binary options trading can be learned in a shorter period of time and requires less money to trade. Binary options simplifies options trading and gives you a defined payout when you make a profitable trade. Binary options expert like Mr. Jean-Yves Sireau warn that you need to fully understand the business and how to trade before entering. He recommends that you do your research and take your time. Options trading if done properly can be very profitable for investors.
Hedge Funds – Hedge funds require a qualified investor to make a very large initial cash investment to a near autonomous manager of the fund. These fund managers typically move from investment to investment very quickly based on very intricate market strategies. Their returns can diverge wildly, but the best create double digit annual returns consistently over time. Hedge funds invest in different assets like commodities, shares and currencies with significant portion of Hedge fund capital is invested in derivatives are used to manage risk.