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Basic guide to short term and long-term investing

If you wish to invest your money and don’t know what strategy to choose, then read my guide about optimal investing strategy and you will have better understanding in it!

Long term investing

If you are looking for long-term investing, then stocks can be a very good option as they have shown the best returns. You could purchase individual stocks, but you may be best off investing in broad mutual funds or exchange-traded funds (ETFs).

Let’s start with the simplest way – to save your money on bank accounts. In finance world we call it

1. Basic Savings, High Yield Savings Accounts, Money Market Accounts, Online CDs

  • Interest rates on cash savings accounts aren’t very high these days, with the average on savings accounts about 0.10%.
  • Money market accounts offer virtually the same level of safety as traditional savings accounts, but usually with higher interest rates of about 2%.
  • Many online banks also offer certificates of deposit with rates of 3% or more. So as you see according interest rate, it is the best alternative.

2. Growth Stock Funds and ETFs

Many mutual funds and ETFs have a focus on growth stocks, meaning that they search for companies with a pattern of strong revenue growth and a deep competitive advantage. As their focus on growth, these companies can offer better returns.

3. Index Funds and ETFs

ETF is an investment fund operating on the stock exchange holding assets such as stocks, bonds or commodities. These funds track a specific index and accordingly will design its basket of securities. They offer the benefit due to their low costs, tax-efficiency and features similar to a trading stock.

An index fund, on the other hand, is a mutual fund or an ETF constructed to follow a specific industry or index such as the S&P 500.

These so-called “index funds” are often passively managed, and usually, the lack of an active manager can keep expense ratios very low. Many brokerage firms will allow you to buy and sell these funds and ETFs with zero commission.

4. International Stock Funds and ETFs

Sometimes you can find better prices overseas. Sometimes I advise to my clients to look to a mutual fund or ETF that offers broad exposure to international markets.

How to invest

Short-Term investing

1. Peer-to-Peer Lending

Nowadays you can make money of other people’s personal debt. Many internet platforms allow you to purchase loans from individuals. Potential returns from these platforms vary, depending on the risk level of the loans you invest in. It can be between 2% and 6% annually which is better option compare to banks.

2. Short-Term Bonds

A short-term bond fund is a fund that invests in bonds with maturities of less than five years. If you are searching for short term investing then it can be a solid option.

3. High-Yield Bonds

A high-yield bond is a high paying bond with a lower credit rating than investment-grade corporate bonds, Treasury bonds and municipal bonds. Because of the higher risk of default, these bonds pay a higher yield than investment grade bonds. Issuers of high-yield debt tend to be startup companies or capital-intensive firms with high debt ratios.

I hope my article about investing has shed light on your vision of it. I wish you the best of luck building your portfolio. If you have your question, please write it below, I would be glad to answer your questions or to introduce your project to my team at Astorts Group to be evaluated.

Alessandro Rocco Pietrocola is an entrepreneur and investor based in London and operating mainly in Europe, Asia and Oceania with main focus on UK, Baltic Countries, Russia, China, Hong Kong, Malaysia, Singapore, Middle East and New Zealand as area of interest! At the moment is the CEO of Astorts Group. He is an UK FCA (Financial Conduct Authority) Approved Person and is has great experience as director of regulated companies. He uses to dedicate part of his life to inspire others and help them achieve the most out of their life. Since he was 20, he had successfully founded and managed several companies operating in the field of management consulting, wealth management and fintech. He loves travelling, he is a cigars lover, an amateur golfer and a dapper man.

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