Saving And Investing - Learn To Invest Your Money

 

Investment Method 1 – CopyTrading

CopyTrading means copying successful investors, so you wouldn't have to worry about investing.

Instead of deciding what you want to invest in, choose who you want to invest in instead. You can get started by following the instructions below.

Copying successful investors is a good idea because they are experienced investors, which in turn makes investing easier. For example, the investor Olivier Daniel has already received positive returns for 40 months following this method. Through the link, you can listen to a podcast called Copy Traders Club, where Danvel tells his best tips for the world of copy trading.

As you can see from the picture, you get small but steady returns with him. By copying him, you end up being significantly richer than if you invested in stocks yourself.

1. Find him on Capital.com

 

Once you're signed in to Capital.com, just enter your name in the search box you'll find at the top of the page.

We use the following name as an example: Olivierdanvel

Just click on his name, then you will be directed to his page.

 2. Click the 'Copy' button.

On this page you have the opportunity to read essential information about Olivier Danvel.

He also writes updates on how investments have been going recently so that people can easily follow his decisions.

3. Copy and earn money

After this, you will be redirected to the purchase page. It looks roughly the same as the page where you bought stocks or cryptocurrencies.

Min. the investment amount is $200, but Olivier Danvel recommends investing $500.

After selecting the quantity, click the 'Copy' button.

Now you have invested in Olivier Danvel and he will invest in you.

I recommend that you invest in him and leave the investment untouched for many years, because then you can make a lot of money due to the interest rate effect.

We are big fans of Olivier Danvel because of his ability to make money in both financial crises and good times. This way we don't have to actively buy and sell. He does it for us.

 

 Investment method 2 – Shares

 

 A well-known investment is stocks . Almost everyone's first investment is in stocks. We hear news about shares and are constantly dealing with brands whose shares it is possible to own. When you have good investment targets in your sights, shares are a sure choice.

Investing money in shares is simple. If you invest in good companies, you can make a lot of money over time. We all know the stories of investors who invested in Apple or Netflix stock 10 years ago and are now rich.

But how do you get into investing in stocks? It's simple because you can buy shares for just $50 on Capital.com. Since you don't pay a brokerage, you can easily invest in smaller amounts and thus increase your stock.

 Buy stocks without commission Capital.com

  You can also buy, for example, cryptocurrencies, indices, and ETF funds.

The buying process is exactly the same as with CopyTrading. Instead of finding a good investor, you choose the stocks you want to invest in.

If you're not sure where to start, there are some safe stocks that have weathered the crisis and are definitely making a comeback:

• Apple shares
• Alphabet (Google) shares
• Amazon shares
• Microsoft shares
• Facebook shares

 

 Investment method 3 – Passive investment

 

 Not everyone likes investing because they get nervous while following the market. Especially now, during the coronavirus crisis, it is difficult to follow the courses.

However, we have a solution for you:

 

Passive investing

 

  Here you choose an ETF that tracks a market index. When the economy grows, you become richer.

Let's say you invested in the S&P 500 in 1990. In the table below you can see how little the current crisis affects the value of your investment

Graph of the S&P 500 index since 1990. (Macrotrends)

Because of this, we recommend the Vanguard S&P 500 Capital.com.

It is possible that others will make more money than you in the short term. However, you will make money in the long run.

If the economy grows, the value of the S&P 500 increases. There is no guarantee that you will pick a stock that will rise as much as the economy.

 

  This is why you need to invest

 

 

 Have you heard of inflation?

All you need to know about inflation is that if you don't want to invest your wealth and have money in a 0% interest account, you are poorer.

Inflation is relatively low in Finland, because EU countries are trying to beat the inflation level below 2%. Over time, it has a huge impact on wealth. Especially if you have money in a savings account.

In just 10 years, you will be significantly richer if you invest your money. In 30 years you will already be much richer than today. This is due to your annual return and, more importantly, the interest rate.

Investment guru Warren Buffet calls interest the reason for his wealth and Albert Einstein called it the 8th wonder of the world.

Basically, it's about reinvesting the profits. If you are able to reinvest the income, you will receive interest on the interest and thus increase your wealth significantly.

 

 Where can you invest?

 

  The good thing about investing is that there are many investment opportunities. In the next section, you will learn how to build an investment portfolio and spread your risk.

The easiest way to spread the risk is to invest in several industries or at least several stocks. You can also invest in different areas. Although there is a big difference between real estate investing and stock trading, what they have in common is that they are both good investments. A safe investment target can be found by diversifying.

 Investment in shares

 

 Investing in shares has historically produced stable returns, and it is both the cheapest and easiest form of investment. Today, stocks are subject to competition from other types of investments, such as the stock market.

For most people, stocks are their first investment, and it remains one of the safest forms of investment.

Not because the stock market always moves up, but because it increases in value over time. Over time, the value of the stock may increase significantly, but there may also be drastic declines on the way.

Shares can therefore be both a high and a low risk investment. It's not contradictory because it depends on where you invest. With the stock index, history has shown us that it goes up and down constantly, but that it moves slowly forward.

In the chart you can see that investing in the S&P 500 will make you significantly richer.

If you invest in individual stocks, you have the possibility of a higher return, but the risk of loss is also higher. When creating your investment portfolio, consider the type of stocks you want to invest in.

 

Crowdlending

 

  Crowdlending is a relatively new investment opportunity. The concept is to create a platform where you can borrow money. The platform is a link between those who need loans and those who give loans.

The platform is owned either by the lender himself or by an intermediary company that offers loans from several providers at the same time. In our opinion, the last-mentioned solution is the safest.

In this context, the platform that brokers loans from different loan companies often sets strict requirements for its partners and does more to protect investors (users).

In 2018, the bond yield was 6–14%. That's an impressive return that stands in stark contrast to the bond market, which returned 1-4% in 2018. Crowdlending has become a preferred method for many people in record time to get higher returns.

 

Real estate investment

 

 One of the classic forms of investment is real estate investment. Investing in real estate has been possible as long as people have lived in apartments. Many of today's wealthy families have created their wealth through real estate investments.

The downside of real estate investing is that you have to make a large amount of investment right away. It keeps many away from real estate investments. Today, crowdfunding platforms have entered the market, where you can either own part of the property or invest in loans used for housing projects. This clearly lowers the threshold for starting.

 Merchandise

 

 Commodities are popular among day traders because the daily price fluctuations of the commodity can be speculated upon. The most common are gold and oil. I don't recommend that you start trading commodities because it requires a lot of information about prices.

Commodity investing typically works by investing in the so-called future. In some newer trading systems, such as Capital.com, you invest through a CFD, which is a contract between you and the exchange. In both cases, this means that you don't own the asset, but you track its price.

 

Forex trading (currency trading)

 

 

 Almost all day traders have tried forex trading.

Currency trading is done by investing in one currency against another. A forex trader thinks about how one country's economy works in relation to another. Another good thing about currency trading is that the market is open 24 hours a day, 5 days a week.

 

Cryptocurrency

 

 Cryptocurrencies are probably one of the most volatile investments. They are best known for Bitcoin, but there are countless cryptocurrencies you can invest in.

The advantage of cryptocurrencies is that they can rise and fall very much in a short period of time. That can be a good thing for a day trader. For the average investor, this is a disadvantage because it can be difficult to know where the market is moving.

 

  This is what you should know when creating your investment portfolio

 

 As you can already see, you have an incredible amount of investment options. At this point, it is worth spending time developing an investment strategy.

Once you have a strategy, you can start building your own investment portfolio and spread your risk.

Therefore, you need to find out:

• Are you mostly a passive or active investor?
• Do you want to be a day trader?
• What is the size of your investment?
• Do you want low or high risk and therefore lower or higher returns?

It may be that you want to combine both high and low risk investments. My recommendation is that you set a percentage for investment types.

 Risks

 

 The risk is that your investment will generate a negative return and you will lose money. A good investment is a productive investment.

A low-risk investment is defined as one with low price volatility. In contrast, high-risk investments experience significantly more price fluctuations in their course.

Investments with a higher risk often have a higher probability of negative returns, but you can also get a higher positive return through them.

The problem is that even if you choose a higher risk investment, it doesn't necessarily lead to a higher return. There is no guarantee that you can actually get a higher profit by choosing a higher risk.

Instead, think about risk by experiencing greater fluctuations when you take greater risks. Therefore, you need to have some patience when you start investing. The best investment targets may not be found immediately.

 

Diversify your investments to minimize risk

 

In this way, you reduce your risk because you have to be more really unlucky if all your investments lose money. A safe investment means several investments.

You should also avoid day trading and active investing if you want a low risk portfolio. When it is a passive investment, the return comes little by little. The best investment destination can only be found by experimenting.

Low risk: This typically results in 80% bonds and 20% stocks if you invest through a bank or mutual fund. Low-risk investments are usually a safe investment target.

High risk: This typically results in 90-100% stocks and 0-10% bonds if you invest through a bank or mutual fund. High risk is for those who expect the investment to follow stock market returns or potentially hit the market.

When you invest yourself, you have many options when it comes to high risk investments. It's everything from day trading, stocks to cryptocurrencies. If you choose cryptocurrencies, I recommend dedicating a certain amount of your portfolio to it. I wouldn't recommend keeping your entire portfolio in cryptocurrencies.

 

 How to best invest your money?

 

 Below is an example of what a well-designed investment portfolio looks like. We always recommend creating an investment portfolio before making an investment.

In addition, ask yourself the following questions:

• Purpose of my investment?
• Schedule (when you plan to spend the money)
• Risks (low, medium or high)
• Goals (How much money do you need?)

Please remember that there are no guarantees associated with investments and that they always involve risk.

 

Point 1: The purpose of the investment

 

 If you already have a goal, write it down. Even if you feel like the goal is clear, writing it down can help and make it more concrete. This way you can also commit to it better.

Your goal can be big or small. The most important thing is to start as early as possible so that you can benefit from the interest rate effect.

In practice, even a small amount can become quite a significant amount over time. Just remember that despite the decline, stocks have historically returned an average of 6-8% per year, while bonds have historically been more stable, yielding an average of 2-3% per year.

Once you've created your goal, use these numbers to see if your goal is realistic.

 

Section 2: Schedule

 

 You should consider how flexible your schedule really is in relation to the goal you set.

If the market crashes, can you wait another five years for your portfolio to increase in value before you retire?

 

Section 3: Risks

 

 Look at your schedule and financial situation. If you make a risky decision, it will be too late to regret if the value of the investment decreases.

You can choose to start soft with small amounts and more stable investments, and if you feel that you can handle more risk, you can gradually increase the size of your investment.

 

Point 4: Objective

 

 How much money do you need to invest each month to reach your goal? How much money do you need to withdraw, not only here and now, but also in the long term?

Again, you can start with a smaller amount and adjust the amount gradually so you don't have to withdraw money from your investments up front.

You can now go through all the points and when you are done, you can start assembling your favorite portfolio.

You can combine a passive and an active portfolio by allocating a certain predetermined percentage to stock trading and the other part to an index fund. Alternatively, we also recommend reading about the Capital.comCapital.com CopyTrading program, which can be a good way to spread risk out of your investment portfolio.

You can also drop a comment if you have something specific that you lack in investment skills.