It’s a well known fact that we can earn money only by working and consequently if we want to earn more then we should work for additional hours. However, working hours are not limitless and besides, there would be no pleasure in working all the time and having no time to spend the earned money on leisure and entertainment.
Investing in a right way is the key of reaching your desired financial freedom. Therefore, most people, instead of putting a lot of hours in working, can pass an interesting time and meanwhile earn money. Does it seem appealing? It is quite simple: you make your money work for you through proper investment. This maximizes the earning potential regardless you work overtime, look for a job with high salary, or just spend hours sleeping, reading a book or chatting with friends.
In Finance the definition of investment is given so “Investment is the purchase of a financial product of high value with an expectation of beneficial future returns. Thus, again we come to the point that investment means using money in the hope of earning more money.
But here you may ask, what to invest and how to invest to get your expected result. You have a wide opportunity of choice; investing on financial instruments, such as stocks, commodities, precious metals and foreign currencies, and for various purposes like for pension, putting in business, buying a luxurious house and a number of other goals that one can intend to reach. Though there is a certain risk level in investing in such instruments, it also gives an opportunity of getting returns over a period of time.
In order to overcome the confusion and make a reliable investment you should try such methods which offer simultaneously investing on various products. This brings forward the idea of portfolio trading and investment, where the large variety of trading instruments let you create effective asset allocations. By investing on different products you will keep the balance of risk and return. In other words, you can make a great profit with the lowest risk.
The Features of Portfolio Investment
Portfolio investment day by day increases its popularity among individuals and organizations. And this depends on a number of factors. One of the primary benefits of portfolio investment is that it provides investment diversification which creates ideal opportunities for lowering the risk of losses. If you want to firstly analyze and only then put your money into investment, you had better search for such opportunities which will let you transfer your ideas into trading-analytical system, estimate them based on certain historical data, and only then start your investment activities.
Such a method which has been developed recently and has already gained professional investors’ attention is the portfolio investment method called GeWorko. By applying GeWorko method you will be able to perform certain functions each of which will contribute to highly profitable investment. It provides the following features:
- Creating unique personal instruments (PCI) from a wide variety of financial instruments, including currencies, metals, stocks, indices and commodities which can graphically reflect the price history and be traded
- Making proper analysis before investing and trading your own investments
- Creating effective asset allocations that will raise your portfolio diversification. This presupposes correlating assets in such a way that by the decline of one asset price the value of the other will rise, thus keeping the overall balance of your investment. As to understand the difference between the investments on a single asset, let it be a currency, a metal, stock or index, and a portfolio investment you should analyze both of them separately. For, instance, if you invest on only USD the risk that you will undergo losses is higher. Economic events, natural disasters, wars, and numerous other factors have a direct impact on currency rate, so that it will be really risky to invest on a particular asset. Whereas by portfolio investment you can choose the instruments you find reliable, correlate them in a proper way, so that reduce the risk extent. Thus, for example you can invest on gold, USD, coffee and many other instruments you logically think efficient. Here the decline of gold price for example will not preoccupy you so much since you have other instruments also invested, here they are USD and coffee, which will compensate the loss.
- Checking the behavior of newly created instruments and finding the optimal ratio of the expected profitability and risk tolerance.
Thus, among the numerous investment strategies you can develop yours. The goal of making an investment is getting as much profit as possible. Try to use methods that will lower the extent of risk and raise the level of return.