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The first investing step

What is the first step when one starts to invest?

The first investing step is figuring out which types of assets you want to own. You have several options:

  • Savings

  • Shares / Stock markets

  • Property

  • Commodities

  • Hedge fund

Investments in hedge funds and in commodities are resevred to a certain type investors (the largest ones, or instutional investors).To invest in a hedge fund you usually need a minimum investment of around $200,000 if not more. That’s a lot of money for an average investor.Investing in commodities is not that easy either. Investing in commodities takes some extra learning and is often described as a sophisticated asset.Commodities prices can be extremely volatile and investing in commodities is differet drom trading in other types of assets for many reasons. It usually requires the investor to use derivatives such as futures. An easier way would be to invest in the shares of a commodity company but that would be considered as an investment in shares then.

So regular investors (including most wealthy ones) have generally to opt between three choices: Savings, shares and properties. Savings is quite a simple process so we will ignore it. Investing in properties is very common and if well done can make you good profits with relatively low risks while investing in the stock markets is the best way to achieve the higher returns but is a bit more complex than investing in properties.

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