How to make money by investing?
❓ What types of investments are there?
In our investments series we’ll discuss basic types of investments: bank deposits, structured deposits, bonds, stock, real estate, precious metals, paintings, coins, options, etc.
💯 Investments and happiness
We believe that investing is not a tough thing to do. Investing should bring joy, not trouble. If investing for you is torture, we doubt you’d be happy even if you make money off of it.
🔱 Combinations of investments
There could be a situation when finding the perfect investment for you is an issue. You need to be able to have access to money in case of emergency and to have an income.
🌀 Example of combination
In situation described above the solution would be to use combinations of investments. Having half of your money on deposit, for example. That would be a way for you to protect your money against inflation and use it when necessary. The rest of money could be used to buy a shop and have it rent out.
🔛 Is a combination of assets the same thing as diversification?
No. It is important to know the difference between the two. Diversification is a risk management strategy that mixes a wide variety of investments. It is ineffective and could be dangerous. A combination of assets is a way to adjust investments within the specific parameters.
❗️What is important about combinations of assets
It’s extremely important to choose components carefully. If it’s done poorly, there’s a chance it could become a diversification and that way the chance of loosing money increases.
Many inexperienced investors think that they’d escape the risks by diversification meaning they would divide the money and invest in different places. We believe that diversification is an excuse for bad investors. Diversification will work only if you analyse all assets and risks thoroughly. One a very experienced investor is capable of doing so.