Understanding investmentInvestment can seem like an attractive option for increasing return on your capital, especially when interest rates on savings accounts are so low.Whether you are looking to invest yourself, or for someone to invest your cash on your behalf, there are several factors you should consider before you begin.How much can you afford to invest? It is important to recognise that when you begin investing your money you will introduce an element of risk to your capital. Generally the higher the potential for return the higher the risk to your capital, so don’t be sucked in by high rates but consider carefully how the investment would sit with your attitude to risk.Before you start investing you should ensure that you finances are in order and that you are not investing with money that you can afford to risk losing. For example, will you be able to pay all your debts easily? Do you have a buffer of savings to fall back on? Many experts recommend that you have the equivalent of at least three months wages to fall back on in case of hard times.Why are you investing?Before deciding on the right investment option for you, you should have some sort of financial goal in mind. Are you looking to generate an income from your investment, or simply to increase your capital?Set a time frame within which you can realistically achieve your financial goals, and decide on how long you are willing to commit your capital in order to achieve your desired returns. This will help you to find the right kind of investment for you. If you have goals in mind, you can easily tell when they do not live up to or exceed your expectations.What type of investment?There are four main investment options available-1) Stocks and shares2) Investment funds (including Unit trusts, OEICs and tracker funds)3) Investment trusts4) BondsThe right one for you will depend on you attitude to risk. For example bonds tend to be a safer option than investing in stocks and shares, but you will be likely to see lower returns. which option is most suitable for you will also depend on whether you are looking to make a lump sum investment or if you want to invest more regularly in smaller amounts.DiversificationInvestment almost inevitably comes with an element of risk, however by diversifying your investments you can reduce risk. Investing in areas of assets that have little in common means that if one area fail it won’t take your full investment down with it. You can diversify your investments by putting money into different companies, markets, assets or types of investment.Understanding investment can be complex, and you may want to seek professional advice.

Gold investments are among the best alternative investments currently available, especially in the context of the economic insecurity that still affects many world economies.Why It’s Worth Investing in GoldGold is seen as a great investment whenever there is the threat of a raising inflation, as it helps people convert volatile assets into a precious metal that will continue to be valuable regardless of what befalls the economy.But gold also makes for a possibly good investment for those who seek to get a nice return on their investments. Short term investments in gold, however, do not tend to be as rewarding as other investments, since the price of gold is somewhat more stable than that of say silver, which rises and falls more often and more significantly.But when it comes to long-term alternative investments, gold is considered by many to be unrivaled. That’s because gold has been since time immemorial prized for its beauty and value, and will continue to be so for years to come regardless of what happens with the financial markets.Unless an unimaginably vast deposit of gold is found soon – which is unlikely, considering that right known gold deposits are actually dwindling – gold will continue to retain its high value, which makes the precious metal ideal for an alternative investment.Gold is venerated and desired and these contribute to making it one of the most secure things to invest it. And besides, when you invest in gold you can actually own the material, which may give you a pleasure than not all the money in the world can buy.Gold’s Rivals: Silver and PlatinumGold clearly dominates the other precious metals. Silver is more volatile and much less valuable, its market being much smaller than that of gold. This makes silver investments potentially good for quick gains, but ultimately unreliable for long-term serious investments. And besides, silver takes more storage space than gold.Platinum, on the other hand, is more valuable, but also more difficult to handle. Investments in platinum are infamous for their high risk, and only few experts really carry them out. What’s more, unlike gold, platinum is hard to convert into cash.How to InvestGold investments can be some of the most rewarding alternative investments, especially when they are significant. But even investing in small quantities of gold can be rewarding.You can invest in gold by buying bullion or coins. Alternatively, you can buy stock in gold mining or gold producing companies, as well as gold futures contracts. Some say though that the best gold investments are those in which you buy and own the precious metal yourself.Investing in gold is definitely one of the hottest alternative investment opportunities today. But to invest successfully you need to compare investment opportunities and to go with the one your calculations point you to.

If you feel clueless this mutual fund investment guide is written for you. It may not be the best mutual fund investment guide ever written, but it could be the simplest. Where’s your money? Chances are you already have an investment in funds, or will some time in the future.Mutual funds are the easiest way in the world to invest in stocks and bonds. And stocks and bonds are the building blocks of any investment portfolio, whether large or small. The giant insurance companies and pension funds manage their own stocks and bonds. Most individual investors rely on fund companies to do the management for them. If you invest with the best mutual fund investment companies, you get good service and the cost of investing is minimal.When you make an investment in mutual funds you simply invest a dollar amount. The fund company then issues you shares based on the price of the fund’s shares upon receipt of your money. Then they invest your money along with that of their other investors. Equity funds (stock funds) invest your money in stocks. Bond funds invest in bonds; and balanced funds invest in both stocks and bonds. The value of these shares will fluctuate. Hence the value of your investment will go up and down as you hold it.There is one exception to the above statement. The fourth major category of mutual funds is money market funds. The value of their shares is stable, at $1 a share. These are the safest funds, and they simply pay interest in the form of dividends. Funds that invest in stocks and/or bonds usually pay dividends as well. You can receive these dividends, or simply tell the fund company to reinvest your dividends to purchase more fund shares. The latter is automatically assumed if you hold mutual funds in an IRA or 401k.Very simply, you just pick the funds to invest in and send in money. Whether in your 401k, IRA, or an account you open with a financial planner or on your own with a no-load fund company… you invest your money with them and they do the rest. You will also receive periodic statements that show you what you own and the value of any mutual funds you have with them.Don’t avoid mutual funds. They are the best investment for most people most of the time. These funds are also the investment options available in most 401k plans. You need to invest in stocks and bonds to put your money to work. Otherwise, you’re stuck with money safely tucked away someplace making peanuts in the form of interest. When you think of stocks and bonds, think stock funds and bond funds.We wrap up our fund investment guide with one of life’s realities. Investment companies (mutual funds) do not work for free. The best mutual fund investment companies keep the cost of investing low, and most funds are reasonable in the cost department. If you want to invest on your own and keep the costs low, open an account with a no-load fund company. Your best mutual fund investment is often a low-cost fund with either of the following reputable fund companies: Vanguard or Fidelity. These two also happen to be the two largest investment companies in the fund business. Check them out on the internet, and call for free information.If you explain that you have money to invest and want to learn more about their mutual funds, you’ll get a nice package in the mail a few days later. Study the material, and you won’t feel so clueless anymore. Good luck and I hope this basic investment guide has been helpful.