I have a Saving. How do I invest it now?

Remember some topics we’ve seen in our blog: it’s worth being the one who makes the decisions, it’s worth being the own administrator of your finances and finally it’s worth having financial freedom! As we saw, the first step to achieve it was by identifying our income and expenses in a budget in order to have our opportunities clearly identified.

To being able to talk about savings or investment, we must organize ourselves to have the resources that we’ll allocate to that end. In addition, we must know the term of investment that we’re looking for (short, medium or long term), the type of investor that I am (a risk lover who accepts “a lot of risk” or averse to risk who prefers “little risk”) and finally know the alternatives that must closely match our objectives.

This is how we come to the process of identifying the investment tools that most suit our requirements and our tastes. We group the investment instruments in two main branches to be able to explain them clearly: Fixed Income and Variable Income.

The Fixed Income or Debt Instruments are those in which a debtor has the obligation to pay the amount loaned and the corresponding interests that represent the gain to be obtained. We could expect these instruments to be more volatile the longer the term. They can be government (issued by the Federal Government, States and Municipalities), Corporate (companies), in national or foreign currency.

The Equity or Shares are financial instruments in which one owns a percentage of the shares that represent the capital stock of a company. The gains / losses are derived mainly from the change in the price of these shares. An additional income can be given if the chosen company pays dividends to its shareholders.

Now, we can integrate an investment portfolio that is a financial instrument in which several instruments are combined (fixed, variable, governmental or private, national currency, foreign currency, etc.), in order to achieve all our expected objectives. of risk, performance and term. Basically, what is sought when investing in an investment portfolio is to diversify. As the saying goes: “don’t put all the eggs in one same basket”.

A portfolio should consider a part with enough liquidity to face unexpected events and emergencies, and the rest should be distributed among our medium and long-term objectives. It’s always useful to have a financial adviser to achieve a diversified portfolio and optimize the performance and time according to our profile and our objectives.

There are other types of investments such as in real estate. Generally, this type of investment has positive returns, however, it may not always be so. Sometimes to access this type of investment requires large capital, if you’re not in this situation you can access this market through crowdfunding that involves bringing together several investors to achieve a particular goal.

Investment in metals and precious stones can easily be converted into money, but in the long term in stable situations they can have negative returns.

Another alternative could be the investment in Derivatives, which are financial instruments whose value is based on the price of another asset, examples of these may be: futures, forwards, options and swaps. However, the main objective of these instruments is coverage or speculation.

As we can realize after this brief tour of the simplest instruments of the market, it is necessary:

  • identify yourself as an investor (lover or risk-averse)
  • know the required investment horizons (short, medium or long term),
  • take care of liquidity and performance in order to start as an investor

Given this situation, it’s advisable to start with an expert and preferably belonging to a serious market institution. And after a while, go little by little learning and making your own decisions.