If you are a beginner in the financial world or do not know where to start to generate income from your investments, we want to give you this comparative guide to know the advantages and disadvantages of the online earning website and different current markets, so you will be prepared, and you can choose the one that best suits your needs and level of experience.
Here are the most important markets of the moment, pay attention and compare them!
Why invest your money?
Before you start studying the different financial markets, it is very important that you know why it is good for you to invest your money nowadays, if you haven’t thought about it before or if you are afraid of taking a risk and losing, we want to show you that it can be something more positive than negative if you do it in the right way.
Investing your money can be a great way to start building a small fortune in the long run, this is becoming more and more relevant in a world where money can be lost very easily, that is why if you learn how to invest it correctly, you can get an important return that will help you maintain a comfortable lifestyle in your retirement, so you will never have to worry about money again.
Through investing you can earn passive income, which are significant returns that will help you retire early and be able to live off of it without any problems, plus it will open up opportunities for you to invest it in other types of markets, which in turn will continue to generate passive income. It is a cycle that if started in the right way, it can be the key to success and fortune.
How to find the ideal market?
When you have finally decided to start investing your money wisely, it is essential that you find the first market in which you will start trying your luck to earn passive income, this always tends to confuse new investors, as they often do not know what each market is about, or which one can be the best to start with a minimum amount of investment.
The key to find your ideal market is the self-exploration of your finances and the establishment of a short-, medium- or long-term objective, that is to say, before choosing a market you have to know where you want to go with your investment, or what your intentions are, only then can you start choosing the one that fits what you are looking for. If this is difficult for you or you are not sure of what you are looking for, the best alternative is to seek the advice of experts to help you define your investment style and what you are willing to invest to achieve your goal.
If you want to consult some advice for your first investments, click on this link.
The different markets of the moment
So that you can explore the options that currently exist in the financial world, we will show you some of the classic markets or those that have emerged in recent years, so you can see a clearer picture of what alternatives you can choose for your first investments.
Real Estate
The real estate market is one of the classics for investment and is usually the first one in which beginners invest since it represents immediate security for the future and will always offer lasting wealth.
The profitability of real estate depends to a great extent on the demand and stability of the market, so if housing prices decline or increase, it may have higher or lower profitability. However, you must remember that it is always better to invest in real estate when prices decline, so you will have more facilities to buy a property.
Normally the average annual profitability of real estate is 4%, this is a stable value that can increase even up to 10% if it is a good year, and if the investor has made the most of their property, either by renting or adding improvements that increase the value of the property.
- Advantages of investing in real estate:
- Obtaining a lifetime asset that can be revalued over the years.
- Possibility of liquidity and mortgage loans.
- Passive income from the rent of the property, which can be positive to pay the mortgage loan or obtain investment returns.
- Disadvantages of investing in real estate:
- Property maintenance and tax returns.
- Tenant search and lease application.
- Additional expenses in periods of low demand.
- Problems selling the property in market downturns.
If you want to learn how to invest in real estate, check out this guide.
Stocks
Investing in stocks is another classic alternative when it comes to start investing in the financial world, most beginners seek to multiply their money by betting limited amounts to different companies. However, some people make these investments without proper advice, and may not be ready for the stock market crashes and risks.
If done correctly, the profitability of the shares can be significant at times, since in the long term you can obtain profits proportional to the money invested in that company or society, but as we mentioned, the stock market is quite volatile, and is not the most suitable for people with low risk tolerance, it is an investment that should be carried out with the support of experts and rigorous monitoring.
For this reason, it is not easy to predict the profitability of the investment in the stock market, because at one moment it can be up, and in another it can fall, the idea is to learn to move with the risks and know how to bet the right amount of money to not suffer too many losses.
- Advantages of investing in stocks:
- It is an automatic and easily accessible system.
- Multiple options and offers to invest, you can choose the right one according to your investor profile.
- Possibility of diversifying your investments to compensate falls of some shares with the rise of others.
- Affordable minimum investment, with which you can invest in different stocks without losing too much money.
- Disadvantages of investing in stocks:
- Highly volatile market, it is difficult to invest if you have low risk tolerance.
- Returns are long-term, short-term gains are insignificant.
- There is liquidity risk, you will not be able to dispose of cash flows immediately.
- Without expert guidance and good market analysis, it is very possible to fail and experience losses.
Want to know more about investing in stocks? Click here.
Precious Metals
Investing in gold and precious metals has been one of the most stable investments of all times, due to their significance in all parts of the world and their ability to be easily exchanged or sold. The value of gold and silver has been steadily increasing over the last few years and it is believed that it will continue to maintain its stability and growth.
This is why most investors seek to diversify their portfolios by acquiring gold and silver, because in times of downturns in other markets, such as the stock market and real estate, precious metals lead the way and can sustain investors’ need for capital and appreciation.
Investing in precious metals will always be a smart idea, as they are able to hold their value and continue to increase over time. In the last two years, the revaluation of silver reached 40%, and the profitability of gold reached values above 110%, something that is not common in other conventional markets.
- Advantages of investing in precious metals:
- Different ways of acquiring them, in lingots, coins, certificates of deposit, investment funds, shares of mining companies, etc.
- Significant profitability and revaluation.
- Market stability.
- High demand for their use in different sectors, therefore, higher value.
- Disadvantages of investing in precious metals:
- A lot of security is needed to store them and keep them protected.
- Profit is only obtained if their value increases, they do not provide income or dividends.
- They can fluctuate in value as a commodity and there may be losses in long-term investments.
Cryptocurrencies
Cryptocurrencies have increased in popularity in recent years and have become the most popular investment option for both beginners and experienced investors, however, it is an excessively volatile market and quite risky if you bet a lot of money on buying Bitcoins, Ethereum or other available cryptocurrencies.
Investment in cryptocurrencies has given much to talk about because of the peaks of fall and rise in their values, sometimes reaching profitability figures of up to 600%, and other times falling in very low values, but the truth is that cryptocurrencies depend too much on their price and the amount available online, so that their value fluctuates from one moment to another.
Although it may seem like an option you should stay away from, it is an interesting market to diversify your investment portfolio and gives you the option of some profits at the right time and in the short term, the ideal is not to buy too many cryptocurrencies right off the bat, as you could lose your investment quickly.
- Advantages of investing in cryptocurrencies:
- The possibility of making large profits with a sudden increase in value.
- The cryptocurrency market is always open, unlike conventional banks.
- The security of blockchain technology keeps transaction data safe.
- Disadvantages of investing in cryptocurrencies:
- Volatility of the cryptocurrency market, values fluctuate too fast.
- Not proven to be a good long-term investment.
- Understanding how cryptocurrencies work requires a lot of time and effort.
- Security risks for beginners who may fall into hacker traps.
If you want to know more about investing in cryptocurrencies, click here.
Luxury goods
Luxury investing has become a favorite of investors in recent years, as it has proven to be one of the most profitable in the financial markets, with impressive value retentions and almost non-existent volatility. The purchase and collection of luxury items such as Rolex watches, Chanel handbags and Hermès bags has been one of the safest investment alternatives for investors, who subsequently turn to the resale market for returns on their investment.
In the last three years the returns to collectors for Rolex watches were 33%, those of Chanel bags reached a figure of 24.5%, and those of Hermès bags 38%, which means that these accessories retained their value and increased it in a short period of time, thus becoming a safe investment option and quite profitable in the long term, since the longer the time, the higher the value.
Luxury accessories are acclaimed as collectibles in major auctions, particularly in the British house Christie’s where different pieces are auctioned annually, and where predilection is shown for Birkin bags from the French atelier Hermès, often reaching resale values of 350,000 euros to 500,000 euros.
- Advantages of investing in luxury goods:
- Minimum luxury investment value of 500€. A low amount to start with compared to other financial markets.
- High return value and revaluation possibilities, an advantage for long term investments.
- Very low risk market, losses are nil or almost non-existent.
- Withdrawal of funds whenever you wish and access to them at any time.
- Possibility to work in line with professional resellers, in charge of managing investments in exclusive items. So, you can see the status of your investment from the inside.
- Disadvantages of investing in luxury goods:
- Fluctuation in value of some collectibles depending on the year and the listing market.
- Problems of authentication and sale of counterfeits in some online marketplaces.
- Difficulty of purchase in some official stores due to waiting lists.
Do you want to know more about luxury investment and how to carry it out? Click here.
Now that you have been able to compare the advantages and disadvantages of some of the current investment markets, surely you can get advice from experts and find the one that best suits your interests as an investor, the most important thing is to study each of them before starting your investment and dare to start, even with a minimum amount of money, so you can build a heritage that will benefit you in your retirement years, and that will benefit your children and grandchildren in the future.
Have you already chosen your ideal investment? If you want to look for other alternatives and consult our informative articles, click here.
Take control of your money and learn how to multiply it!