Investing money has become essential, in fact, it is one of the most important pillars of your personal finances. Therefore, it is very important to know all the alternatives in terms of investment locations in order to make the right decision and make the most of your savings.
It is necessary to work hard to earn and save some money, but if you do not invest that or part of that money, you will lose the opportunity to increase your profits in the short and long term. We will tell you the importance of invest your money and some of the pros and cons of the range of possibilities where you can do it so that you know where and how to invest your money.
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Why is it necessary to invest money?
Investment is a very interesting and simple economic exercise. If we can save a sum of money each month and allocate it to investment, over time, we will see how our capital increases without any extra effort, only through saving efforts.
But the investment is a serious decision and it must be the result of the meditation process, because just as it can generate profits, if the funds are not invested properly, there will be losses, so before investing it is important conduct market research and study the range of possibilities to know how to start investing.
In many cases, the fear of investing leads to saving in accounts or deposits. This is a safe option, but the return is zero, that is, there is no option to lose this money, but there is no option to earn more. In addition, when it comes to savings deposits, inflation must be considered, that is, over time, money can suffer a loss of value.
Where to invest your money in 2021: Pros and cons
1. Investment Funds
Pros
It is managed by a group of qualified professionals with knowledge and experience in the matter, so it is assumed that it will provide added value, which will be reflected in the expected increase in market profitability or capital protection.
The fund updates its net asset value every day, so it is easy to know the real value of any of our positions and their behavior.
Mutual funds require a smaller initial investment because they are made up of low-value stocks to make it easier for new investors to enter the fund.
cons
Mutual funds have several costs that must be considered. It is true that these costs are not "paid" by investors because they are included in the final return of the fund, but in the long run they are obvious.
Some funds have subscription and sales feesVery few, but there are. These costs can be high because they depend on the capital we subscribe. The managers defended themselves that the purpose of these funds was to guide long-term savings
Will these professionals really make a difference? Unfortunately, this is a difficult question to answer. More and more companies are charging high fees to shareholders while doing nothing with the customer's invested money. This is one of the biggest risks common investors face. For this reason, many prefer to train to know how to earn money by investing on their own.
Many investors believe that entering a mutual fund is not an investment. Buying and selling or deciding whether to withdraw from the market is a feeling that we cannot obtain with funds. Some investors want to trust their own wealth management and want complete control over their own money, something mutual funds cannot offer.
There are countless different investment styles, but the participants have no say in the fund. The manager described his investment method, if you like it, if you don't like it, you have the door.
2. Cryptocurrencies
Pros
Are virtual currencies are not regulated by any type of government organizationsuch as countries, banks, financial institutions or companies. This offers the possibility of being able to use them anywhere in the world.
Due to the complex combination of proven encryption technologies, it is impossible to counterfeit or copy cryptocurrencies. In this sense, everyone has the necessary encryption key to carry out any type of digital operation.
Cryptocurrencies such as Bitcoin or Litecoin restrict the issuance of virtual currencies. This makes them deflationary cryptocurrencies, because the issuance of these digital currencies will decrease over time.
All transactions through the blockchain are public. Blockchain files are stored on multiple computers on the network, not in one place. Therefore, this type of storage makes it readable by all users, making it transparent and difficult to change.
In addition, there are more and more businesses that accept cryptocurrencies as a payment currency, this operation is carried out through the mobile payment with the application of the user's choice.
cons
Currently, there are still regulatory laws being monitored and several EU directives are pending approval.
Despite the growing trend of cryptocurrencies in recent years, many companies are still afraid to use this virtual currency, mainly due to the risk of price fluctuations.
3. The stock market
Pro
He one-click access to all financial products in the world It is one of the biggest advantages of investing in the stock market.
Many wonder how to invest in the stock market... you can start with a small amount of capital, sell shares at any time and obtain funds immediately. They will be sold at the price your investment is currently at, in profit or loss.
Stocks have proven to be one of the most profitable methods over long periods of time. In any case, you must be clear that past earnings never guarantee future earnings and in the stock market there is always risk involved.
Against
The stock market is characterized by its constant and volatile unpredictability and risk. Whoever wants to win will have to be prepared to lose. And it is that in the stock market there is neither short nor long term security. That is why there are many people who do not know how to start investing in the stock market, it causes them rejection and distrust.
Among the disadvantages of investing in the stock market, we could highlight that profits are not guaranteed and always there is margin for losses fortuitous and risk. In addition, it is necessary to have a minimum knowledge of the stock market to know how to invest in shares. The markets are very volatile, and a lack of knowledge could lead to many losses.
Market values not only depend on demand, but factors such as: political, environmental and/or social.
Our opinion
All the options to invest your money have one thing in common: Get informed and investigate to draw up a strategic plan to meet our personal goals. From Fazil we bet on cryptocurrencies, we bet on decentralized platforms where users have absolute power without being controlled by great powers. Although it is true that cryptocurrencies have a negative factor, such as price volatility, we encourage all users to inform themselves and receive financial education for it.
