Where To Invest Your Capital

One of the more pleasant decisions in life is figuring out where best to invest your capital. Of course the point being that in addition to not losing any money, you will want to actually end up with more money. At the end of the day it is all about risk management, and what sort of investor you are. Remembering that less risk usually equals less reward, are you willing to compromise the potentially large profits that you can earn on your money for ‘safety’? It’s a question only you can answer.

What I can tell you though is that there is no such thing as an iron clad guaranteed safe investment. That is incredibly important to realize at the outset. There is nothing that you can do with your money that guarantees you will still have it a year from now. For example – if you put it in a bank, in a term deposit, the bank may collapse, the economy in your country may implode. Under your mattress – well the kids may find it and buy a car made entirely of licorice. Extreme examples, but you get my point.

There are such things as annuities, which are basically private pension arrangements with a company, where in exchange for a sum of money, they will pay you another sum of money in your retirement. Sounds OK and there are good tax breaks to be had, but be careful to look carefully at annuities pros and cons before you sign anything. And remember that even after you have signed on the dotted line, the company may collapse, or someone at the company may just run off with your money… nothing is guaranteed.

No matter where you invest, there are techniques you can implement to reduce the risk to your capital. If you are planning to invest on the stock market, be aware that vast sums of money are lost there – true, vast sums are made as well, but how do you know you won’t be amongst the losers? Minimize your risks, and diversify your investments. If you were to approach a penny stock broker and ask them where to invest your capital, and then you went to one of the top stockmarket brokers and asked the same question, do you think that they would both tell you the same thing?

Of course not – that’s because they each have a vested interest in you buying your stocks through them. At the end of the day, you must do your own research and learn what risks you are comfortable with. It is true that high risks mean high potential returns, but there are never any guarantees.

No matter what investment product you end up investing your capital in, how much you diversify or shield your capital from potential loss, there is always that chance. That’s why you should never invest money that you cannot afford to lose – because you just might lose it all. That would be sad, but it’s the reality – and any investment adviser or broker who tells you otherwise is best kept away from your money, because they aren’t being honest with you.