Where to invest money?

There are many ways to invest your money but some of them may be a bit misleading when you search for the term on internet.

For instance, to invest your money you should not use:

These four ways to invest money are not for investing but for trading, speculating or betting, whatsoever.

What I mean is that the word investing is associated to some markets, products or services that have nothing to do with genuine investing.

What we do when we are going to invest our money is to try an asset that will give us some long term gains, whether in fixed or capital returns.

Where invest money

The best investing vehicle in the capitalistic or democratic era is the stock market, without a doubt.

Despite the fact that they seem a very risky asset, the truth is that stocks have beaten their opponents in the long run and with an acceptable risk and volatility, unless you lived in Russia in 1917, obviously.

Only in extraordinary cases, like that of Russia or in North Korea, Cuba or China, the stocks lost all their value. Although the rest of assets did not fare a better outcome.

Bonds, gold, real estate, etcetera, got confiscated as well.

Nothing can escape the revolutionary fervour.

Unless we had that kind of revolution stocks outperformed the rest of the assets.

The volatility has been quite high but not much more than other assets.

It is unlikely to get a bear market of more than 60 or 70%.

Most of the big bear markets reach 50% in falls and do not last for too long.

The good thing is that the return of dividends investing gets very good when the stocks face a bear market, making them a good investment when things get rough for those who have capital and are willing to invest in the middle of a recession.

The key in this case is diversification, as usual.

The best thing to do would be having a portfolio of stocks for the long term, which could include different sectors and countries.

There is nothing more diversified than that.

The more stocks we can own the better for our diversification.

An acceptable way of diversifying our stocks for small investors is by using funds or ETFs linked to the main indexes like the S&P 500.

Imagine you buy gold and we keep it in some security box in Switzerland.

We will always have some risk of being stolen, whether the company that stores the gold is a scam or because the government confiscate it, a very small possibility in a country like Switzerland by the way.

But the probability of that to happen is there.

However if we keep the gold in four different countries it is more difficult that the four of them will confiscate our gold at the same time.

Although the probability of losing some of our gold is bigger this way.

Nonetheless, it is always better to do some sort of diversification, whether in stocks, bonds, real estate, jewellery or precious metals.

There is no way to have 100% guaranteed security in our investments.

All investment has an inherent risk.

Invest my money now

With respect to “where to invest my money no”, it is a complicated question, with which we will have to be very careful, especially if we find some specialist very interested in our money and start getting advice on where to put it.

It is always to be conservative or invest the money ourselves.

Then there will be nobody to blame when things turn out to be bad.

For instance, as I said that the stock market is the best place to invest it is always a good idea to put money every year in it, whether it is rising or falling.

The bad years will be compensated with the good years and it will eventually most probably be fine.

If we want more returns it is likely we have to go to some growing economies but the currency risk is quite high there as well.

With returns close to zero percent, the bonds of many countries do not seem attractive, yet there is a lot of demand for German or Japanese bonds at those prices.

Why?

It is always not an easy thing to get to invest our money.

There will always be uncertainty.

All situations are open to changes, and now is not an exception.

Regards, and good investing.