Buying real estate is one of the best tools for preserving and growing capital. But it is not suitable for everyone, because it requires really large amounts of money.
Bonds
Investing in bonds is recommended for beginning investors who are just learning the securities market. Bonds are similar to deposits: they provide guaranteed profit with minimal risks.
The issuer (the one who issued the bond) borrows money from investors and undertakes to return it with interest. The issuer may be a company, a government agency, or the government itself.
Based on the type of income, four types of bonds can be distinguished:
coupon - with receipt of a percentage of the nominal value;
discount - they are sold at a price lower than the face value and are redeemed at the face value;
with indexed denomination - the amount of payments lithuania mobile database depends on the rise in prices;
with structured income - the amount of payments depends on the situation on the financial market.
To invest with minimal risk, you should choose coupon or discount bonds. You will know in advance when and in what amount you will receive payments. Securities with an indexed par value and with structured income can bring greater profit, but investing in them is still risky: if you misjudge the market situation, you can lose part of your capital.
The main risk associated with investing in bonds is the bankruptcy of the issuer, which is why many people start with government bonds. Other risks are not as significant and not always obvious. For example, you can buy long-term coupon bonds, and the average interest rate on these types of securities will suddenly increase. You will not be able to withdraw money ahead of time and will lose part of your income. Therefore, it is not recommended to invest in securities for a long term: it is better to withdraw funds more often and direct them to other investments.