In the current economic climate it would be easy to think that investing is a risky business.? You don?t have to look any further than the professional money managers to see this as Greek debt was written down by nearly 74% in some cases. If professional money managers can lose money in what they saw as ?low risk? investments, what hope does the individual investor have?
The hope that the individual investor has is that they can invest in assets that professional money managers cannot. In many cases, professional investors are limited by trust deeds and other legal documentation which limits the availability of suitable investments for large fund investors.
The intelligent individual investor on the other hand is nimble and can invest small amounts of money in assets which will generate a substantial return over the medium to long term.
The professional investor has to beat quarterly performance indices to ?prove? that they are doing a good job with your money. This puts enormous pressure on professional managers to always be doing something to boost the fund?s performance. This gives the individual investor a good opportunity to outperform the professional as the individual only has to take action when there is a need because of changes in the market.
You on the other hand don?t have to be like this. You can do your due diligence and analysis and when you are sufficiently informed, you can invest. My view is that the investment is one you will hold for a long time, not just to trade at some point in the near future. Warren Buffet became the best most successful investor by investing for the long term and only selling when market conditions had changed.
You should develop your investment knowledge over time and when you feel ready should invest your own money, either by backing your own judgement or getting advice from those who have a proven track record with their own money.
Now is the time to invest your capital, as to do nothing is effectively to lose money. Most Governments have too much debt and therefore are inflating their economies in order to reduce the real value of Government debt. The effect of this is to see the value of your cash being eroded every year by about 4%.
Instead of seeing cash in the bank as safe and secure you should see cash balances at the bank as losing value at 4% a year.
Once you look at cash in this way, you save 6 months? worth of cash only to cover any unplanned events and put the rest to work, to invest for returns well above 4% a year.
Fortunately with Alternative Investments there are a number of investments that will deliver double digit returns to investors, which has the benefit of protecting you from inflation and making you a real return on your capital.
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