Investments for beginners is a hot topic for another year. The most common misconception regarding investing is that it is something that only the wealthy can do. This might have been true in previous times. However, today that barrier is gone, thanks to companies and services that have gotten to work on making investment options accessible to everyone, including beginners and those with just a modest amount of money available for investment. Here’s a breakdown of the best investments for beginners in the following.
Probably everyone has heard someone mentioning how cheap gas prices (or another product or service) used to be when they were younger. As time passes, inflation erodes the value of money. Investing can help you combat inflation, as it increases your chances of being able to afford the same amount of goods and services in the future. By investing, you can make your money work for you. If you earn compound earnings, this implies that any returns you earn can be reinvested to earn more returns. You gain more from compounding returns the earlier you begin investing. The longer you stay invested in the market, the greater your earnings.
How can investing early in life benefit you?
Investing at a young age can be advantageous in many ways. The benefit of investing at a young age is that you will have time to embrace your long-term investing horizon to its fullest. Since you have enough time on your side, you can explore multiple investment options and take some bolder steps with no difficulty. Investments for beginners have become easier and more accessible. It would not matter how bad things go for you since you have enough time to recover and make good profits from your experiences.
A traditional bank account with little or no interest can cause inflation, devaluing your hard-earned money. Your savings can keep up with inflation or even outpace it if you invest in assets like stocks and bonds. Starting investing at a young age can be immensely beneficial if you want to protect the value of your savings and achieve long-term financial goals, wealth building, and financial independence.
Nevertheless, new investors need to know how much risk they can handle before making any investment. Some investments carry more risk than others, and you don’t want your plans to be disrupted after you invest. If you intend to invest money, think about how long you can live without it and whether you’re comfortable not having access to it for a while.
What are the Best Investments for Beginners?
There’s an endless list of investments for beginners to choose from. However, the majority of the investments generally fall into one or another of a handful of categories commonly referred to as “asset classes”.
What are Asset Classes?
An asset class is a group of investments that display similar characteristics and adhere to similar laws and financial regulations. Assets were acquired for the purpose of reselling for a profit.
Following is a list of asset classes that are familiar to most people:
- Stocks or Equities
- Fixed Income investments/Bonds
- Cash or cash equivalents, e.g., Mutual funds
In addition to these asset classes, you might also consider investing in:
- Futures and commodities, like Gold or Oil
- Alternative investments like Foreign Exchange (Forex), Real-Estate and Collectibles
- Sustainable, Responsible and Impactful investments (SRIs) that are primarily concerned with social and environmental effects
1. Forex – Largest Market in the World
Forex stands for foreign exchange, also known as FX or currency trading. The FX market is a global marketplace that exchanges national currencies and ranks at the top among financial markets worldwide. That’s why investors from around the world gravitate towards it. The forex market is 25 times larger than the global stock market.
To trade forex is to bet that the value of one currency will rise against another in the hopes of making a profit. If you’re interested in forex trading, it’s a good idea to do your homework before diving in. Remember that you can make more profits when you invest time and effort in learning what you’re trading.
Forex is one of the top investments for beginners, thanks to its easy approach and advanced trading apps. This Beginners Guide to Forex Trading will tell you everything you need to know to get started with Forex trading. Despite being very attractive and lucrative, it can also be risky. It is possible to start forex trading with low deposits starting from $1.
2. Indices – Excellent Opportunity for Beginners
Index investing is an excellent investment opportunity for beginners. Not only is it easy to understand, but it is also easy to execute the investment. Moreover, index investing is also an effective method of managing risk and gaining consistent returns. Since you buy the market rather than individual stocks, picking stocks is simplified in index investing.
Since index funds are passive investments, they tend to have lower management fees and expense ratios (ERs) than actively managed funds. Furthermore, index funds tend to be less tax-efficient than active funds because they make fewer trades.
An index fund is a mutual fund that aims to mimic the overall performance of a particular market. Since it is overseen by fund managers with a history of successfully managing investment portfolios, investing in it helps you unlock the power of compounding, as you have a long-term investment horizon.
3. Metals – Best for Long-Term Investment
Gold and silver have been recognized as valuable metals and have been coveted since the beginning of civilization. Even today, precious metals offer a good investment opportunity that is often less focused on short-term profits, making it one of the top long-term investment options.
Unlike other assets, precious metals offer unique inflationary protection. They offer intrinsic value, do not carry credit risk and cannot be inflated.
During times of rising uncertainties like those we’re experiencing right now, the price stability of precious metals makes them an important asset to rely on.
You can invest in precious metals like gold and silver in many ways, and there are many reasons why you should. The XAU/USD pair and XAG/USD are the most popular pairings AximTrade offer, making it easier than ever to incorporate gold and silver as part of your forex trading strategy.
4. Energies – Most Abundant Energy Resource
Energies like oil, are one of the most abundant energy resources on earth and can be expected to remain a popular investment for a very long time to come. Since it is an asset with a finite supply, the price is likely to fluctuate in response to supply and demand. This volatility attracts a lot of new investors.
Modern technology has opened up an even wider range of online trading options. Adding oil to your portfolio is a good way to start investing. You can find a trading option that fits your preferences, budget and financial goals since there is a variety of oil trading options.
As a beginner, you can now easily enter the world of energy trading through AximTrade. Crude oil (XTIUSD) and Brent oil (XBRUSD) are the most famous energies to trade. The best course of action is to familiarize yourself with the trends in the market and stay up to date with the latest news about the price of oil.
5. Crypto Trading – Meteoric Growth in Recent Years
Cryptocurrency trading has seen meteoric growth and made a profound impact on global financial markets in recent years. There are now over 5 thousand cryptocurrencies on the crypto market after Bitcoin, each with its own specifics and potential.
As a beginner, you can invest in cryptocurrency by choosing AximTrade. With online trading booming in recent years, setting up a trading account is easier than ever. The crypto market is about 11 years old and exclusively deals with digital assets. It operates 24 hours a day, seven days a week.
Bitcoin and Ethereum are the most popular cryptocurrencies. Now you can trade Crypto easily with AximTrade around the clock. AximTrade lets traders and enthusiasts trade on major crypto pairs including BTCUSD, LTCUSD, and ETHUSD.
Choose A Reliable Investment Option
Before venturing into the investment world, the first and foremost step is to ensure you understand the risks you are taking on. It is advisable to meticulously weigh the pros and cons of a potential investment and see whether it is in line with your investment objectives, risk tolerance, and financial goals. If you want to invest your first funds in Forex, you need to start with a brokerage company that offers secure accounts and reliable trading conditions. This is where AximTrade stands out. Check out the AximTrade review.
AximTrade stands out as the best broker for its reliability and excellent trading conditions with flexible leverage, 100+ trading instruments, 0.004s execution speed, and up to 100% forex bonus. AximTrade’s standards of quality are uncompromising when it comes to transparency and integrity and is considered the best investments for beginners to start with.
AximTrade offers comprehensive brokerage services on global markets with MT4 execution and Copy Trade platforms. In addition to Forex, AximTrade also offers crypto traders and crypto enthusiasts some of the best investment opportunities by offering major crypto pairs such as BTCUSD, LTCUSD, ETHUSD. The platform also offers over 72 stocks and a variety of financial assets for beginners and professionals to access the market. Detailed instructions will be provided on how to open a forex account, outlining everything from the benefits to the terms. Happy Investing!