6 Ways to Start Invest Small: Tips for Small Capital Investments

小額投資理財方式有哪些?小額投資理財需要注意什麼? - 雪花新闻

As someone who just enters the workforce, you would probably, beyond the basic living expenses, be able to save some money after working for a while. Do you plan to invest that money, but feel clueless about the variety of financial options and products available? This is a very common question for people who are starting to learn about investing and managing money.

In this article, we will introduce several investments with low threshold, which will not cause life or even psychological stress to the audience whose economic situation is still unstable. After analyzing your financial situation and choosing the right way of investment, you can roll out your first bucket of gold steadily through long-term adjustment and planning.

 

Conservative Investment Approach

 

Bank deposits

A time deposit is simply a deposit. It seems to be a “risk-free” investment. Its biggest drawback is that it has a low rate of return and may not even be able to withstand the annual rate of inflation.

If you put a sum of $1,000 (preferably from an emergency reserve fund, or funds that will not be used in the near future) into the bank and do not use it for a whole year, you may only receive only about 0.2% interest (about $2) on-demand deposit, but the fixed deposit interest may be as high as 2% (about $20). After all, the demand deposit is not considered an investment.

 

Buy/sell foreign currencies 

Every country in the world has its own currency, such as the US dollar, Japanese Yan, British pound, Australian dollar, etc., and the exchange rate among different currencies is called “exchange rate”. Banks publish spot exchange rates for each currency, so if you are interested in investing in different currencies, you can buy low and sell high to earn the difference.

Assuming that the RMB/USD exchange rate of last year is 7:1 last year, and a small investor bought $100 with $700 RMB. In this year, the exchange rate of RMB: USD rise to 7.2:1. If all the $100 purchased last year are converted back into RMB at this time, it will be converted back into $720 RMB without considering handling fees and other issues. For this transaction, the investor can earn an exchange rate difference of about 20 RMB, and this transaction is a typical forex transaction.

 

Savings insurance

Savings insurance is usually divided into “single payment, 3 years, 5 years, 10 years”, etc., and the average return rate usually falls between 2%-3.5%. Although the annualized rate of return increases, the return is considered non-guaranteed, with certain unmeasurable factors.

The disadvantage of savings insurance is that it is difficult to cash in. Depending on the savings insurance, if you want to terminate the contract in 3-5 years, you may face a certain amount of loss, so it is likely to be a “negative return”, which is another risk the savings insurance.

 

 

Robust Investment Approach

 

Stock

The pressure to buy a “piece” of stock must be great for the new graduate, but now many brokers can help buy a share and sell it in pieces so that those who want to try to buy shares with little money can get what they want.

The zero-share approach is suitable for stocks with higher growth potential, but the fees may be relatively high. However, stocks with high industrial stability are suitable to be purchased in the form of “fixed investment”.

 

Fund

If you want to invest, but you don’t know how to do research, you can choose to buy a fixed amount of funds on a regular basis. You only need to set aside a certain amount of money every month and give it to professional fund managers to manage, so as to achieve the investment purpose. Of course, the rate of return depends on the performance of the fund managers.

It should be noted that a certain amount of management fees will be charged for investments managed by the fund manager. It is suggested that before purchasing, you can shop around several companies to select the fund and managers that are most suitable for you.

 

 

Aggressive Investment Approach

 

Margin trading

Online margin trading is a widely popular way of investment. Such trading can involve a variety of financial products, mainly forex, such as EUR/USD, GBP/USD, AUD/USD, USD/RMB, USD/JPY… and so on, which is commonly referred to as forex margin trading. It also includes contracts for difference, which can involve any financial product, such as stocks, commodities, indexes, ETFs, etc.

Internationally, such transactions tend to be large, with a unit often jumping in tens of thousands of dollars, which is beyond the affordability of small investors. Therefore, in order to facilitate the participation of small investors, some brokers and Banks have arranged a margin arrangement that allows investors to deposit a small amount of money into their accounts and then trade in the market with leverage (usually over 100 times), which not only magnifies the rate of return but also provides flexibility in operation.

This model solves the problem of high barriers to entry. It can be tailor-made for small investors. Investors can first select an appropriate trading platform and broker, and then deposit the margin in a third-party trust bank, and then start their independent and diversified trading and investment.

 

 

Six Tips for Small Investments

 

1. Set investment goals in advance

You need to set a clear goal first before you can make your investment plan in the future. If you just make an investment blindly, you will lose your money unconsciously.

 

2. Establish the right investment mindset

No matter what kind of investment you choose (even a bank deposit), there is still a risk or uncertainty. A lot of newcomers to the market may aim to high and may end up chasing the market accidentally. Only by getting the right mindset can we avoid loss in the face of crisis.

 

3. Keep a budget

Many people may feel that they don’t have enough money to do investment, as they only have little money to play with each month after deducting the living expenses. But in fact, there is a lot of small money in life, are inadvertently wasted, so the first step for a small investment is to do a good job of budget control, maybe you can get the ticket immediately.

 

4. The greater the risk, the greater the return

Each investment asset, including stocks, futures, funds, etc., has a reasonable rate of return. Generally speaking, items with high rates of return are associated with high risks. There have also been a lot of assets that can be invested in a small amount recently, but it is easy to lose a lot if you only see the high return and ignore the attendant risks.

 

5. Penny and penny laid up will be many

The method of “regular quota” is very suitable for investments with low capital, but we also know that it is not easy to stick to it. Once the financial market turbulence leads to the loss of capital, many people will be faced with

 

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Risk Warning: The above content is for reference only and does not represent ZFX’s position. ZFX does not assume any form of loss caused by any trading operations conducted by this article. Please be firm in your thinking and do the corresponding risk control.

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