The desire to earn money is one of the movers of human evolution. If earlier the creation of a business was the most profitable way to protect and increase your funds, today there are tools that allow you to make money while on vacation. The era of securities is just beginning.
A Brief History of Investments
For a long time, loans have been the main investment vehicle. Probably the simplest way to invest in the exchange era (before the invention of money by mankind) was "selfish charity." A successful food manufacturer could feed strong people experiencing hunger due to temporary difficulties (weather, military). Later, the survivor became their farm laborer or helped in difficult times.
In the Renaissance, the Medici merchants in Florence, tired of trading, became "money changers", investing in real estate under construction and young businesses. Even at that time, it became "fashionable" to buy monopolies - securities that allow you to engage in any industry without the interference of competitors.
Today's market consists of millions of trades per day. Thousands of businesses are set up and go bankrupt every day. The shares of many of them, as well as the securities of countries and industries, are quoted (have a single price) on the stock exchange.
Direct investments
Direct bonds are principally used by the world's leading investors. There are different types of investors. Venture capitalists invest in "startups" - the most fragile companies, consisting of 1-2 entrepreneurs, 0-5 employees and one "super idea". They assess the likelihood of a company's success by eye and take most of the company for next to nothing. However, their risk is as high as 90 percent. In other words, nine out of ten startups don't survive. The profitability of the same venture investor is formed by their success of 10% of the selected companies.
Portfolio investment
Good investors generally avoid short positions (fast bets), minimize losses, and analyze the entire market. The modern financial "ecosystem" is fragile - the fall of one enterprise can "chain" cause a crisis in other industries. Sometimes correlations (relationships, relationships of variables) of stock prices are not obvious: in a crisis, a fall in a tire manufacturer can affect acoustic companies (car acoustics).
Financial "bar"
The Barbell Principle advises keeping 80% -90% in the safest instruments (money, precious metals, real estate), while 20% -10% should "work to its fullest." The most risky "low interest" can be placed in profitable bonds of developing countries, complex derivatives (credit instruments), etc.
It is used by many experienced investors, keeping up to 90% of their "budget" in cash and government bonds. A small part of the savings is stored in the most risky instruments, stocks of emerging companies and their shares.
