Want to start investing from scratch as a total beginner?
Are you confused on what investment strategy to use in preserving your capital and making decent ROI?
Contrary to popular opinion, investing doesn’t have to be risky. You don’t have to throw your money in the wind, while hoping and praying that you get a deserved return.
In this article, we’ll take a look at 3 simple strategies any beginner can utilize in investing safely and profitably.
Let’s get started.
Start with a Fixed Income Investment
This is the best place to start as a beginner investor. You don’t want to take a lot of risk at this stage.
A fixed income investment is perfect at this stage because it helps to preserve your capital, while providing a decent return.
It is important to note that most fixed income investments, such as fixed deposits and bonds are not liquid, so you should only invest with money you won’t be needing throughout the investment tenure.
Upgrade to a Medium-yield Stable Investment
Once you are done with the fixed income investment, you can upgrade to a Medium-yield Stable Investment such as a REIT or stock index.
These types of investment will provide a higher ROI than a fixed income, while also being relatively safe.
Most REITs and Stock Index will give you an annual ROI of between 10% and 20%, which is not a bad return, considering the low level of risk.
Invest Proceeds into a High-yield Investment
At this stage, when you’ve had a decent run with a fixed income investment and a medium-yield stable investment, it might be time to take a higher risk.
A high-yield investment with a higher risk might be what you’ll need at this stage.
You could invest in a High-yield business venture, cryptocurrency, loans, etc. These investments represent a higher form of risk but with a potential for higher returns.
You don’t have to invest your capital though, as the proceeds from your fixed income investment and Medium-yield stable investment could be used if substantial enough.
Your goal for investing as a beginner is to understand the movement of money, and to learn the skill of putting your money where it is most likely to prosper.
At this stage, you shouldn’t be worried about making the most money or taking bigger risk, but rather, learn how to optimally utilize your capital.
The more skilled you become at investing your money at the right places, the more returns you’ll be able to make in the long run.