Do you know where to invest your money? That is a million-dollar question. The answer will be different for each people. First you need to know your risk profile. Some people don’t like risk, and some don’t mind having some risk. This risk profile will determine where to put your money. If you like risk, then you can invest in riskier asset. Remember that the riskier it is, the higher return you will get. So if you don’t like taking risk, do not expect to get 20% a year return.
The most common place for people to invest money are stocks, bonds, mutual funds, real estate, gold, or starting their own business. Every investment has their own characteristic. It is your job to know the characteristic and match it with your risk profile.
Bond, real estate, and some kind of mutual funds generally have lower risk than other investment. Their return will be lower and it has little fluctuation. On the other hand stocks, option, forex or starting your own business is very risky. With stocks you can loss money in minutes. Do you know how much money you could lose when mortgage crisis happened in 2008? 50% drop in a year is so common that days. How about starting your own business? Guess what. It is riskier than investing in stock, especially if you do not have the skill to manage it.
If you know nothing about investing you need to get help soon. The easiest way is to invest in mutual fund. A mutual fund is a professionally managed type of collective investment. Although it is professionally managed, it does not means that you will not lose money. When economy in crisis, you will most likely lose your money too. The best fund manager beat the market. For example, when the market drop 5%, they will only drop 3%. And when the market rally 5%, they will make you 6% richer.