Whether you have a lot or a little money tucked away for a rainy day, you can use investing to make the most of it. However not enough people know about all the options they can choose from. In fact, there are some great investments that go largely ignored to the private investor, that they can make a great return on. Keep reading to find out more.
Penny shares
Penny stocks are the high risk, high drama sister of the ones floated on the major stock exchange like NASDAQ, IDX, and LSE. While they don’t often cost a penny, they are usually considerably cheaper than most regular stocks, and here’s the rub, their potential for growth is massive. This is in part, because of the volatility of the market. Making it more like a game of chance where you bet on who you think is gaining to win, rather than an educated and well-informed decision.
Of course, that doesn’t mean that you shouldn’t do your due diligence and homework, and there are plenty of sites like https://www.timothysykes.com/penny-stocks that will give you the low-down on how to purchase penny stocks, and which industries and specific companies are looking good at any one time. What you do need to remember though, is that a market that is volatile is one where the rug can be swept out from under you at any moment. You can win big, yes, but you can lose big too. So like any investment you make, never, ever invest money that you can’t afford to lose, or you need quick access to, in the near future.
Commercial property
Commercial property is also overlooked in favour of its residential cousin. Perhaps because it’s not so glamorous so say your own a factory as it is to say you own more than one house? However, it’s a great market to invest in because businesses always need premises, meaning you can make a killing renting it out or selling it back to them.
Obviously, it’s not recommended that you jump in with both feet if you have never made investments in a commercial property before. As you will need to know exactly what to look out for before you part with any money. In particular, a location near to transport hubs and main roads is essential for the company using it. As this allows them to keep their supply chain going without incurring extra expense. Many businesses are also looking for access to natural resources, especially if they are involved in manufacturing process. So proximity to water and other resources will make the commercial property you invest in much more desirable.
You will also need to be aware of how commercial property investment works, and the stages you will need to go through to secure your purchase. The first step is often using websites like http://rumahdijual.com/pabrik-dijual to locate a suitable match for your budget and needs. Then it is important that you or a representative visit in person to check the suitability of the site. A personal visit is no replacement for a decent survey though, so if your interest has been peaked make sure to get this step done before you go further for put any money down. From this point, it’s also a good idea to have a legal representative in the form of a property solicitor like https://www.yufendypartners.com/Partners that can help you check your documents for any potential issues and manage the bidding side of things.
Residential buy to let
Now, while residential property investment may not seem like an often ignored opportunity, buying a residential property to let can be. Basically, this is the process whereby you purchase a home and then lease it out to tenants, who pay you a monthly fee.
Yes, it can seem more appealing to buy and then flip a property quickly, but there is actually really good money be made with this buy to lease strategy, as long as you get a few things right. The first is that you must pick a location that is both desirable and already has good rental prospects. Up and coming areas in big cities are great for this, as there is always an influx of new people ready to move in.
You also need to work out the minimum length of time you will need to keep the property to make good on your investment. Buying to let is often a long term strategy, as the aim is to pay off as much of the mortgage as possible, thus freeing up a greater return on the property when you do sell. Lastly, you need to make sure that you can lease the property for a price that is higher than the mortgage. This is because you don’t want to be in negative equity each month once you have paid this, as well as all the fees that a rental agency will charge you to manage it.
Equity income funds
For those of us that are looking for middle-risk investments, but still want a decent return on our money, the often overlooked Equity Income Fund can make a good choice. These are mutual funds that invest in stable, reliable companies, paying back to their investors in the form of dividends. See a graph of their progress over the years at https://www2.trustnet.com/Investments.
The advantage of this sort of fund allows you to diversify across many different companies, making it a safer investment. Although, once again it is one that needs to be executed over the long term. As this will likely provide a higher yield on your original investment.
ISAs
Lastly, for the more safety conscious investors, there are Individual Savings Accounts or ISAs. These include fixed ISAs, cash ISAs and Stock and Shares ISAs.
If you can get a good rate on interest on a cash ISA, you are onto a winner. This is because they are tax-free, so everything you earn you get to collect. The problem, as mentioned at http://www.moneysavingexpert.com is that most interest rates aren’t that good, ranging from just over 1% for flexible cash ISAs, to just over 2% for fixed ISA account. That means if you need the flexibility to withdraw and use your cash, you won’t be earning too much, even over a long period. Although there is the benefit that your personal limit of £20,000 won’t be affected if you do choose to withdraw, as long as you keep within the guideline set down by your bank or lender.
Fixed ISAs are accounts that you can pay into and but make no withdrawals from. They are like to give you a higher interest rate because they have to encourage you to keep your money with them. That’s great if you are looking to save in the long-term, but can be very costly if you find yourself short with no way to access any funds other than closing your accounts and cashing out.
Lastly, there are the Stocks and Shares ISAs to consider as well. These are a good way of testing the waters in the stock market as you can choose to invest everything in one go, or do it a little at a time, month by month. You also have the choice of the type of funds you invest in, meaning that you can diversify in a difficult market, or focus on areas of growth if you so choose.
However, unlike the other types of ISA, a return on your money isn’t guaranteed here. So make sure you don’t confuse one with the other, as you could end up seriously out of pocket if you do.
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