Cash is the most common form of investment and is typically our first investment (as children) and our
last (as retirees)!
Essentially you put money in a bank account, and the bank pays you interest. This is low risk,
but low return and is therefore ideal if you just want to preserve what money you have and don’t want to take much investment
risk.
Talk to your bank about options – long terms deposits can give you a better interest rate, but will
have restrictions on access to your money and maybe even minimum deposits.
Cash equivalents are
safe, short-term, highly liquid investments that are equivalents to cash (as the name suggests).
Cash equivalents
are excellent savings options for short-term goals and can take the form of a
Certificate of Deposit which provides
an amount of interest for a period of time (much like a term deposit in the bank); or a
Money Market Fund which is
essentially a short-term
mutual fund.
Foreign Exchange or FOREX is a variation to investing in cash is exchanging foreign currencies
whereby you buy and sell foreign currencies to take advantage of the daily fluctuation in exchange rates.
This
is a high risk but potentially high return method of investing and only recommended if you have a HIGH risk tolerance! If
you are interested in trading the FOREX, then check out this
Forex Robot Comparison.
You can also invest in
Commodities such as Gold bullion. Gold is a limited resource, hence its
value is always maintained and is not subject the fluctuations of the foreign exchange rate. Gold is a good long-term, low
risk (and low return) investment.
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