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Thursday, May 17, 2018

Low Volatility Investments And Working The System

By Cynthia Reynolds


It is often said that money makes the world go round. Because of that, people are always finding new ways to make money, either via working hard or getting lucky. Other people invest, but markets can turn on a dime. For some people, low volatility investments are preferred.

Investing involves spending money to make money. That is the gist of it. Putting money into something and hope it works out and returns even more cash back to you. But that is not always the case. Money can go in, but it does always come back out.

Now, it should be said that investment comes with a lot of risk. There is no guarantee of profit, at all. A profit can be made, but not by everyone It is akin to gambling, albeit far more respectable and less risky. The possibility of bankruptcy always looms, but so does the specter of success.

Share prices go up and down with alarming regularity. A stock can be worth a lot one day and fall so hard that it becomes worthless the next. A stock with low volatility essentially means that it is not subject to dramatic fluctuations in value. Investing in a low volatility index can lessen risk to some degree, but it cannot take it away entirely.

The endgame is the return, the wealth being made. Most investors will not get rich, many will not even break even. But all begin investing with the goal of monetary rewards in mind.

Every investment involves risk. Risk is an always present factor in any investment, as success is far from guaranteed. In investing, the general rule of thumb is that high risk begets high rewards. However, studies have shown the exact opposite, that more stable, low volatility indexes often have higher gains.

People can invest in a number of ways. Some buy shares and enter the stock market. Others purchase land. Some start business. Others have a diversified portfolio that includes many different things.

There are many avenues into investment. Some companies allow employees to convert a portion of the regular salary into stock shares. Banks also have a good many investment programs for customers of all financial levels. Some people can through middle man like a stockbroker or a business manager. Others can begin independently provided there is sufficient capital.

Given the potential dangers involved in investing, it can be intimidating. But as in life, moderation is the key. An investment is a seed, planted in soil and nurtured, the seed then grows into a tree that provides food and shelter, and an investment can do the same in the literal sense. A good one can make a decent amount of money, enough to make life that much easier. But to make a good call exercise good judgment. The rewards may seem greater when there is more risk involved, but reality would say otherwise.




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