By investing their free funds in various investment instruments, a person draws them into circulation. This can happen indirectly or directly, but every time there is some degree of risk for the investor. In any case, investing your savings is more profitable than keeping them “under the mattress”. After all, the depreciation of money is constantly going on.
So, the simplest options for investing free money for a novice investor.
Bank deposits
Bank deposits are the easiest instrument for investing money. It is enough to come to the bank, sign an agreement and deposit money on the account. Income depends on the amount of investment, the size of the interest rate and the reputation of the bank. The system of compulsory insurance of cash deposits makes it possible to call the deposit the safest instrument for investing.
The property
Investing money in real estate is one of the most reliable types of investments.
The demand for residential and commercial real estate is high and prices are constantly increasing. But investments in real estate require large cash costs and will bring income only after a long time.
Investing in stocks
Investing your savings in stocks is a very profitable long-term investment. For short periods of time, stock returns may be low. It is almost impossible to go completely bankrupt, but trading stocks on your own requires special training. Stock management is done through a broker, and in order to start trading, you need to open a brokerage account with a financial or brokerage company. You can buy and sell shares bypassing the stock exchange by concluding a sale and purchase agreement and notifying the registrar - a participant in the stock market.
Mutual funds
You can also invest in shares by purchasing an investment share in a mutual investment fund. Investing in mutual funds is an opportunity to invest money without any knowledge of the stock market, since the trading will be carried out by the management company. The minimum period for making a profit is 1 year. The potential profitability increases with the growth of the investment term, since compound interest begins to work.
You can buy investment shares in the offices of the Management Companies (MC) or from their partners (banks, investment companies and other financial organizations). Certain problems exist due to the instability of this market. To avoid financial losses due to illiterate management, you should choose a management company based on an analysis of the profitability of a mutual fund over several years.
General funds of bank management
OFBU (General Funds for Banking Management) are intended for depositors who want to profitably invest free funds for a long time. The level of potential profitability of OBFI may exceed the deposit rates of leading Russian banks. All activities are under the control of the Bank of Russia. The investment opportunities of OFBUs are much greater than that of mutual funds, since the objects of trust management can be not only cash, but also securities, precious metals or natural precious stones.
Trust management
You can invest your savings in shares through trust management, in which investment decisions are made by the manager. The advantage of trust management over mutual funds is the speed of deposit / withdrawal of funds, which ensures their rapid movement by buying or selling shares at the current price. In addition to securities, it is possible to use futures and options. Potentially, it is more profitable to invest in management companies than in mutual funds and OFBUs, but the absence of requirements for portfolio diversification (dispersal of finance) and the strong influence of the “human factor” indicates the high riskiness of this instrument.
