Other Investment Options

11973786_sAlthough more and more investors are turning towards gold and other precious metals, there are still many opportunities available to those who want to save for their future. It is important that you understand the different options, how much you should be investing, which type of investor should consider these options, and what risks are involved with them as well. Taking some time to research and learn about different ways to invest, is a simple way to secure your future, to diversify your portfolio, and to create a portfolio that won’t fail or diminish in value, even though US markets and currencies have been volatile over the past several years.

If you do choose to invest in precious metals, it is still important to invest about 50 to 80% of your money elsewhere. These are a few of the many opportunities available to those who want to diversify, and create a portfolio that will continue to grow over the years.

Bonds

A bond is similar to an I.O.U; it is basically the investor lending money to the government, which will be repaired at a later date, with interest. In addition to the government, you can engage in bonds with municipalities and organizations, or other entities (known as the issuer). The issuer guarantees to pay a certain interest amount during the term of the debt period, and agrees to repay the face value of the bond, at the maturation date.

CDs

A CD (or certificate of deposit) is a time deposit, where you agree to placed your deposited funds with the bank, for a set period of time. Your CD will earn interest at a set rate, during the time it is held by the bank. Although interest isn’t that high, you will earn more with a CD than a traditional savings account, since you are agreeing to allow the bank to hold your money, and invest with it, for the designated CD period.

International Investing

One of the main reasons to invest internationally, is the volatility of the US market (since the 2009 crash), and the inconsistency of the US dollar. With international investing, you can diversify, you can earn higher interest rates, and the fact that you can trade different world currencies, allows investors to truly make a great return, if they make the right move. Another benefit is the fact that you can invest in nearly anything – mutual funds, hedge accounts, American Depository receipts, etc.

Mutual Funds

These are professionally managed investment schemes, pooling money from several investors, to purchase securities. These stock shares are generally open ended, meaning as an investor you can buy or sell at any time. The beauty is that you are investing with a large group, so you can invest in much higher amounts; in return, the money you will get back will be higher when you finally do pull out of it.

401 (K)

These investment options allow you to save towards retirement, with a company that you work for. It is funded through pre-tax payroll deductions, meaning as long as you contribute annually as an employee, you aren’t being taxed on this amount over the years. Additionally, you as the individual, and your company can contribute, meaning you will earn more over the years on this vehicle than you will with other individual opportunities.

Stocks

Purchasing stocks in a company is an opportunity many people make. With stocks, you won’t make much money unless you know when to buy, sell, and trade, and unless you know which stock companies are highly valued at the time. Stocks do not provide much stability, and are one of the riskier of these investment options, but when properly allocated in to the portfolio, they can make a great impact towards your retirement savings. Some people who are interested in gold will study the stock of the companies producing it as well.

Forex

The foreign exchange currency market (Forex), is a market that never sleeps. It is similar to the stock markets in the US and Canada in the fact that you will buy and sell currencies, but it differs in the fact that it is a world market. This means the market never sleeps, and is open 247. Physical currencies are purchased and sold rather than stocks, and if you understand world currencies, exchange rates, and other determining factors, you can really earn big on certain currencies, when you sell high, and buy low. But, in the market, you have to either work with a company that makes trades and sales, or you must use a robot or online program, to help in investing.

Variable annuity

This type of opportunity is one made between you (the investor) and the insurance company. The insurer agrees to make payments to you, either immediately, or upon an agreed upon date. You make either a single annuity purchase payment or several payments. The power of the investment options you choose to purchase, will determine how much you can make with these annuities. These annuities are generally in the form of mutual funds, money market instruments, and bonds; the better these categories perform, the more you can expect to be paid out with this investment mechanism.

Treasury Bill

These are short term securities that mature in one year, or less, from the purchase date. The benefit of these is that they are purchased at a price, below their face value, but at maturity, pay the full value. It is possible to buy a $10,000 bill for $9,500, for a 30 week period. At maturity, the investor would earn $500. The rates are variable, depend on purchase price, and interest rates, which will determine how much the investor will make with each.

These are a few of the many available opportunities that one can choose to engage in.

Of course if you engage in various investment options, and diversify your portfolio, you are more likely to avoid a major loss, and make higher returns on them. Although gold and precious metals aren’t prone to the market’s volatility, you should not place your entire portfolio in to precious metals.

By incorporating several of these mechanisms, not only do you stand a chance of earning more for your future and retirement, you also avoid the risk of losing all your money in one category.

Understanding the ways you can invest, what works best, how to diversify, and determining how much to invest in each category, is something best done with an adviser.

So, if you are planning in any of these accounts and retirement planning, these are some account types to discuss, and a few of the opportunities available for you to consider as an investor.

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