You are somebody that has already settled everything, from a home and bills to invest in life and disability plan insurance Malaysia for your own future safety. In other words, life is good and you are living in relative happiness. Now say you have saved enough that you have much more to spare, what could you spend on besides philanthropy or your family, if you have one?
Investments, you say? Why not? Isn’t it good to put some more of your money aside and wait for it to grow and benefit whatever you are investing in?
It is if you know how to pull the ropes. There are also different types of investments besides stock markets. If you are thinking about cryptocurrencies, forget it. Even if you can do it, the risks of losing your investment is still very high due to their extreme volatility.
Bonds
A bond is basically an investment where you are the “lender” and the entity you invested in is paying you back over a determined period of time that the bond is contractually held. Corporations and governments provide their own bonds, and when the bond matures in the future, as in the contract expires, you will be paid back the capital you invested in.
Though the returns are lower than they are in stocks, it is a less riskier choice. However, the bond’s price can fluctuate depending on several factors such as a company’s liquidation or the government defaulting it.
Mutual funds
Rather than investing in one entity, you want to invest in a broad number of them instead. Mutual funds are your answer.
Shares of a single mutual fund generally holds ownership of small cap, emerging market companies instead of selecting one or more own companies based on research. Mutual funds are managed in either of two ways: actively or passively.
Active mutual funds have fund managers picking securities to put your money in, and the chosen securities are based on whether their own market indexes can beat other indexes. Meanwhile, passive mutual funds, or index funds, simply track major stock market indexes like the S&P 500.
When the stocks of securities that your mutual fund chooses goes up in value, this is when you get your returns. You can buy mutual or index funds from the managing firm or discount brokerages, and since the securities are diverse, the risks are also low.
Commodities
Commodities are physical objects that you can invest in, such as metals, energy or agriculture. Gold might be the most common form of commodity that you may have already heard of before. Commodities can either be tangible or digital, with actual bars of gold and gold ETFs as respective examples.
Commodities are considered an investment since they benefit society in real life, including but not limited to gas, food, oil and so on. Some investors put their money in commodities as their portfolios’ hedges during inflation.
You can buy commodities through various channels including stocks, EFTs, mutual funds or future contracts. Your own bank might also have a platform or section dedicated to investing in gold, so that is also a good staircase to step onto if you want to start.