The 9 Different Ways To Invest
Do you have savings that you don’t know what to do with? When it comes to investing, there is actually a mountain of choices available. Here at The Motley Fool Singapore, we are extremely excited about investing in the shares of great companies for the long-term.
But, to be totally transparent, I would like to highlight nine different things you can invest in.
1. Fixed deposits
The safest type of investment you can make is just to keep your money in fixed deposits that are offered by many banks. Sadly, at current interest rates, the return from fixed deposits may not amount to much.
A bond is basically a debt instrument. When you buy a company’s bond, you are in effect lending money to the company. As a bond holder, you will be entitled to interest payments (also known as coupons) from the issuer of the bond periodically.
Typically, bonds are considered to be a safer investment vehicle then stocks, and thus they tend to provide lower returns in general.
3. Stocks (or equities)
Investing in the equity of a company makes you a shareholder of that company. This is what The Motley Fool Singapore is all about. In our premium service that is built for anyone who wants to know what to buy in the stock market, Stock Advisor Singapore, we provide comprehensive stock recommendation reports and regular email updates.
A favourite investment for investors in Singapore is property. Properties have provided a long history of both capital gains and rental returns for investors here due to the situation of land scarcity that we face.
5. Mutual funds (or unit trusts)
Instead of doing it themselves, some investors prefer to leave their investments to the professionals. You can do so by buying into mutual funds (more commonly known as unit trusts here) or exchange traded funds – both types of vehicles would invest in stocks on your behalf.
6. Venture capital
Venture capital is all about investing in young start-ups. As more and more money is flowing into the start-up space, it is getting relatively easier for investors to invest in young, unproven companies. There are many venture capital funds in the market that help investors invest in start-ups.
7. Peer-to-peer lending
With the advancement of technology, we are now able to directly lend money to private companies. So instead of buying bonds of large corporations, there are now many platforms that allow us to lend money to smaller companies directly. This new platform is known as peer-to-peer lending.
The age-old favourite of many investors. Gold has, for a long time, been an instrument to store wealth. Now with exchange traded funds that track the price of gold, as well as other paper gold investment products, getting exposure to gold has never been easier.
With the speed of development in the technology space, it won’t be surprising if something new is being created everyday. Now, it seems that technologists can start creating their own currencies that are not governed by any government. And, we can even “invest” in these ”currencies,” which are popularly known as cryptocurrencies. The sustainability of cryptocurrencies is quite debatable, so it would be prudent to proceed with ultra-caution.
Now you can see that you actually have many choices on what you can do with your money when investing. From the downright boring fixed deposit to speculative cryptocurrencies, there are options aplenty. But there’s one thing to note – just because choices are available does not mean you should pick all of them. There are risks associated with all the nine ways to invest, so choose carefully.