Basic Investment Options for the Beginner Investor with $1,000
Provided by TechGirl Financial
If you’ve got an extra $1,000 saved up and you want to know what to do
with it — investing is the way to go. Not only will you get to grow your money,
but you’ll also get to learn more about finance along the way. However,
starting out can be a little difficult for beginners. With all the options
available, knowing where to begin can get a little confusing, which is why
we’ve outlined the best options for first time investors.
This is perhaps an option most have heard of, and for good reason. If you buy a stock, you own a portion of a company — this means that you get a portion of the profits depending on how much you invested. Not to mention, you can get returns based on the kind of stock you bought, whether it’s a common or preferred stock. With the latter, the Balance notes that preferred stocks give you dividends at regular intervals, while the former gives you dividends based on profitability. Either way, you’re bound to get your money’s worth if you do research and invest in the right company, as over time, the stock market tends to rise in value. Investing in stocks are also a great way to diversify your portfolio right off the bat.
If you’re in the business of staying updated on foreign news, investing in forex might be for you. Otherwise known as currency trading, this is where you buy and sell foreign currency. This is often done by pairs, such as the USD pegged against the GBP, or vice versa. This is a great option for more than one reason, as it can pose a lot of benefits for beginner investors. A post on the forex market by FXCM, points out that it’s one of the most liquid and highly accessible markets being open 24 hours a day. This has made it one of the most popular investment options around – as its $5 trillion daily trading volume can attest to. Additionally, forex trades can be done from the comfort of your own home, either on your laptop or via an app.
Crowdfunding Real Estate
These days, crowdfunding is a popular option for lots of things — so much so that it became an investment. Ashley Foster told CNBC that it is where investors can pool their assets together in order to invest in commercial or residential properties that would otherwise be difficult to invest in without the right capital. That said, not only does it require a lower amount of capital, making it accessible, but it also delegates management to another party, which means no pesky maintenance fees. There are plenty of platforms that are available to begin with, such as CrowdStreet, Fundrise, and RealCrowd, which means it’s also easy to get started.
In a nutshell
If you’ve decided to start building your investment portfolio, make sure to build it based on evidence, as our article entitled ‘Making Investment Decisions’ notes that investing is a risky business, and requires information over instinct. At the end of the day, the investment you choose should be suited to your budget, your knowledge, and your risk appetite.
Kim Gaxiola, CFP® may be reached at 800.584.3652 or at email@example.com.