Investing can be intimidating as it offers a seemingly endless number of opportunities and assets to grow a portfolio and make some good profit. However, with the number of options available in the market, it can be daunting for newcomers to pick one that can yield good returns.
Hence, it is essential to start by learning the investment basics to decide on the investing options. You don't have to swallow the lexicon all at once, but a few terms are essential to get your head around, and one of those is investment vehicles.
Investment vehicles are the instruments or products that house a specific investment plan and enable investors to generate profits through income or capital gains. Different types of investment vehicles exist, including stocks, commodities, forex, index funds, and cryptocurrencies. Let's understand them briefly
Types of Investment Vehicles
Forex
Forex, also known as FX exchange, is converting one currency into another for multiple purposes, including tourism, commerce, and trading. However, the primary purpose is to earn a profit through the price movement of some currencies. Unlike Stocks, forex trading happens between two parties in an OTC (over-the-counter) market. Forex makes up for one of the most prominent investment markets, with a daily volume of $6.6 trillion. Thus, starting with forex might be the right decision.
Stocks
Indubitably, owning stocks has proven profitable time and time again. Stocks are referred to as shares of ownership in an organization. These shares can be bought on exchanges. However, some companies keep their shares private, which means those shares are not available for the general public for purchase. The price of each stock depends upon the performance of a company.
Commodities
Commodities are basic goods used in trades that are interchangeable with other similar kinds of goods. Some examples include grains, oil, gold, beef, and natural gas. They can be bought or sold through futures contracts on exchanges that review their quality and also standardize their quantity. In tumultuous times like these, commodities are good investment vehicles as they work as a possible hedge against inflation.
Index Funds
An Index fund is a kind of ETF or mutual fund that contains securities in a particular index intending to match the performance of that benchmark. It allows users to accumulate multiple securities in one simple, low-cost investment. Index funds can be bought from brokers, exchanges, or directly from index-fund providers. Starting with this investment option allows users to build a portfolio that aligns with strategies for allocating assets.
Cryptocurrencies
With the industry growing rapidly, people are fast becoming familiar with Bitcoin and other major cryptocurrencies. They are digital assets people use as investments and for purchasing online items. Cryptocurrencies can be traded on online exchanges for one another or can be bought with fiat currencies. Before you start with this finance segment, thoroughly research the market since many cryptocurrencies are highly volatile.
Moving Forward
Once these investment opportunities are understood, investment decisions can be made. As soon as you know what you want to invest in and where exactly, the next step is to find a platform to begin investing. DIFX is an ideal solution for getting the best of all worlds. It is a blockchain-based platform that offers investors all investment vehicles on a single platform. Stocks, commodities, forex, indices, cryptos, and much more are available for trade. Moreover, the DIFX exchange offers one of the lowest rates on a transaction, thereby the right solution for beginners.
