Have Excess Money? Learn the Basics of Investing!

Have Excess Money? Learn the Basics of Investing!

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Where to invest?

Being an investor does not require one to have a lot of money. Nor does it require one to be a financial expert. The real requirement is that, one has to be sure, and one has to be trusting. For as low as P5,000 to P10, 000 one can become an investor already. He and she just have to choose what instrument to invest in, WISELY. Instruments are categorized into three: Cash and Money Market Instruments, Bonds and Stocks and Equities. Remember that when choosing, go back to who you really are.

Have Excess Money Learn the Basics of Investing!

Cash and Money Market Instruments are further classified as to whether you want to put your money into savings account, time deposit, Fixed Income Instruments (1 year maturity) and treasury bills. This type of instrument is used for short-term horizons because money market instruments have short maturity which can be overnight up to a year only. Bonds, on the other hand, are debt instruments that pay fixed interest within a specific period of time and mature on a certain future date. Bonds, in other words is like lending you money to a particular corporation or government with an agreed upon return date of investment. This type of instrument is on medium term horizon. Lastly, stocks and equities are instruments where you have to have a specific portion or part of your desired company. Stocks are more risky than bonds because it is not guaranteed. However, although dividends are not guaranteed, it offers higher potential of return compared to bonds.

While this may seem very difficult to do, like assessing where to invest or to what particular instrument you are going to put your money into, you need not worry. The most fundamental tip when investing is to choose your professional fund manager carefully and wisely, choose someone who is credible and stable enough in making decision as to where he or she is going to put your money into. Because once you let go of the capital, its life does not depend on you anymore.

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Summary

See? Investing is this easy! Just know your O-H-P! Identify your objective, know your horizon and realize your personality! Just know yourself truly and realize your potentials as an investor. Plus, choose your fund manager! Through that, you’ll do good in investing!

*Note: We do not own any media (unless otherwise stated) and no copyright infringement is intended. This summary is only to provide a textual version of the video and an easier medium to understand Investment 101. The original video is from ANC’s On the Money: Investment 101. To view full episode, go to http://www.youtube.com/watch?v=ecGRKiMrE5M

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