This is the best way to invest money according to experts

Elizabeth Smith

Investing one’s savings is a way of earning a return, more or less depending on the risk and capital invested.

The experts have indicated some tips and methods for investing one’s money in a relatively simple and safe way.

Saving to invest

A fundamental requirement for being able to invest is to have money available to invest. There is in fact a close correlation between investing and saving, since if you do not save and accumulate capital, it is difficult, if not impossible, to invest.

Starting from this fundamental assumption, saving is, according to the experts, the first step to be able to make an investment aimed at increasing one’s returns.

In order to be able to do this, experts recommend portioning one’s returns. Thus putting aside and allocating to investments, a portion plus or minus one’s income such as salary.

Savings management

Experts suggest accounting for one’s expenses and allocating, a priori, a portion of one’s income. This, in order to generate a savings fund for important projects, in order to have a constantly growing fund, to be used against unforeseen events. Or, if one prefers, to make small investments aimed at gradually increasing one’s returns.

Investments in this case can be more or less substantial, operated through the acquisition of financial instruments with which one can counter inflation, preserve or increase the value of money. Possible avenues of investment include the acquisition of certificates, or the underwriting of pension or insurance instruments.

Methods of investing savings

There are innumerable ways to invest one’s savings, ranging from the simplest and safest opening of a deposit account, to the most complex and risky financial transactions that may include investments in the stock market or the bond market.

In between, there are an infinite number of financial instruments, made available by banking institutions. Such as, leverage certificates or other types of certificates. They allow savers to invest small amounts of money in order to obtain a short-term return dependent on those certificates.

How to value savings?

Valuing one’s savings, that is, securing relatively safe investments that protect one’s savings and obtain a return from them, can be complicated. But if one follows a few guidelines suggested by experts, the risks can be contained.

The first piece of expert advice is to doubt easy and safe investments that guarantee quick and easy returns. This is because the financial sector is based on a simple rule. Namely, the greater the risk, the greater the chance of gain.

This means that an investment that can produce high returns in a short time is possible. But it is a high-risk investment, and this entails the possibility that the invested capital may not see the expected returns but, on the contrary, may result in a partial or even total loss of the invested capital.

The risk factor

Risk is an ever-present element in financial investments. It can be high or low, generally banks rank the risk level of an investment on a scale of 1 to 7.

1 represents the lowest risk level. i.e. little chance of capital loss but also very low potential returns. While 7 represents the highest risk level, i.e. high chance of capital loss but also very high potential returns.

Inform yourself before investing

To minimise investment risks, it is a good idea to get informed with an expert about the financial instruments available and the type of investment you intend to undertake.

Investing consciously and with the support of experts is the best and easiest way to protect your savings.

Experts, especially bank advisors, have the task of assisting and accompanying clients in their investments.

So if there are any doubts, uncertainties or others, it is always possible to ask them for clarification. And thus take advantage of their experience, professionalism and knowledge of the markets, in order to be directed towards the best investment solution.

Diversification

If there is one thing that all experts in the field have in common, it is the idea that diversification of investments is the best way to protect your investments. Diversification means choosing different investment solutions, in different sectors and with different financial instruments.

Diversification is a fundamental element of any investment strategy. Whether it is a more aggressive strategy aimed at high returns or a more defensive and conservative strategy aimed at capital preservation.

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