If you have money, this money automatically becomes worth less through inflation, or money devaluation. You can buy less and less with your money. So invest your money smartly so that you receive more in interest than inflation. You are always at risk when investing. This is because a bank or company you entrust money to can go bankrupt.
“Investing is investing and committing money for longer or shorter periods of time with the goal of obtaining financial gain in the future.”
The investment market has upward movements and downward movements. The upward movement is often put down as a bull market. The bull (bull) bumps the market up with its horns. In a bull market, investors are optimistic. A downward movement is described as a bear market. The bear (bear) beats the market down with its powerful paws. In a bearmarket, investors are pessimistic.
Investing in the stock market
When you start investing you buy bonds and stocks. Bonds, in short, are loans and investments are pieces of a company. Companies sell products and services. If a company has more revenue than expenses, then a company makes a profit. If you invest in a company, you get a share of this company. If a company makes a profit, then you usually get a dividend. This is return on your share. If a company does very well, i.e. sells a lot and has good prospects for the future, then the value and thus the share of a company will increase. If a company does not do well and makes a loss, the value will fall. Dividends will then be lower.
In the stock market, you can buy and sell shares. Shares usually do not rise in a straight line but they rise and fall with undulations. If you buy in a valley and sell during a peak, you make a profit. However, there are numerous known examples of stocks where stocks only went down.
If you want even more risk and return, you can look for leveraged products and derivatives such as options, turbos and sprinters. With leveraged products, the bank finances a piece and you finance the rest. High levers indicate that the bank finances a lot and you finance a little. On such high levers, you can make a lot of money in a short time but there is also a good chance that you will lose everything. In practice, you are more likely to lose than to win since the bank always applies a financing margin. Also, the bid and ask price is often a difference of a few cents. For example, you buy a product for 1.02 and can sell it for 1.00. The 2 cents seems little but in practice a share price often has to rise several tenths of percent if you want to obtain black figures.
“Investing is investing money with more risk and often more return (but not always).”
You can start saving. Here the risk of losing the money invested is relatively small. When saving with a bank, the return is relatively low. Saving is investing with little risk and little return.
Alternative forms of investment
Don’t want to run a risk on the stock market? Then you can also invest in silver and gold by buying it physically. You can also invest in properties, domain names, art, wine, wood, crypto coins and you name it. Investing in alternative forms can be very fun and surprising. Be creative and research carefully what is value-retaining and value-enhancing.
Investing in practice
If you want to invest in the stock market then you need to proceed with caution. Nowadays investing is mostly computer-controlled and you have to pay attention to many different points of interest. Advice for your personal situation can be sought from a financial advisor.