Best Way to Invest Money in 2011
When we term or describe an investment to be good or the best, there are
three parameters in which the investment option needs to excel. Namely,
returns, time and safety. These three parameters, which are the chief
constituents which would help you measure how good a certain investment
is. Basically these would help you to make up your mind about the
investment. Before we take a look at the best way to invest money in
2011, here's an explanation to the three parameters:
The returns or the return on investment is principally the difference
between the total amount that you invest and the total amount that you
actually get as the final output. The return is basically the profit or
the gain that you have benefited with, in the course of the investment.
The more the return, the better is the investment, a universal rule of
The second parameter is the time in which you receive the requisite
return on investment. The lesser the time, the better is the investment.
However really, really good return on investments often tend to have a
prolonged time period, something that is inevitable.
The third factor is the safety and security of the investment and also
Now when you invest, it is necessary to check these three essential
factors and apart from that you also need to ponder upon the total amount
in which you would be investing. A convenient tally of all these factors,
makes the investment 'good' or 'bad'.
Another very important rule of thumb is that of knowing current market
trend whether it is the bearish or bullish. A bearish market is the one
where the values of securities depict a trend of falling prices. On the
other hand, a bullish market shows the trend of rising values. The rule
goes that any investment made in a bearish market (when the values are
falling) is cheap and there is a huge scope to sell and make profit in a
bullish market (when the prices are rising). Alternatively, one can buy
at the start or primary stages of a bullish market and sell it
immediately, at the right time and price, to make some fast bucks.
However watch out for, seasonal and sudden down falls in the economy as
they tend to be quite risky. Hence to keep the returns assured and your
interests safe, it is advisable to invest during the bearish markets and
of course, sell during the bullish markets.
Best Way to Invest Money in 2011
The following are some suggestions which would help you find the best way
to invest money in 2011. Take a look…
A personal favorite, stock markets tend to offer some very promising
returns, the only condition being that they have to be managed carefully.
Apart from the returns, you can also enjoy some good dividends from these
stocks. Now the rule, buy at bear and sell at bull is best applicable in
this situation. You can safely invest about 5% to 10% of your income into
2. Mutual Funds and Collective Investment Schemes
Mutual funds and collective investment schemes are excellent options to
investment money for a moderate time period, not too long and also not to
short. Such pools of money are managed by professional fund managers and
are invested into other channels and investment destinations to obtain
substantial returns. You will need to invest about 10% to 20% of your
income into such funds. Similarly there are other funds such as Systemic
Investment Plans (SIP), Portfolios and even annuities. As you grow older
and approach retirement, you can shift our focus to annuities dedicating
over 30% of your income to the investment.
Insurance, especially life insurance policies is another investment
opportunity with a relatively moderate time period. Life insurance
policies tend to have what is known as a repayment schedule, where the
profits from investment are shared with the policy holders on a periodic
basis. Apart from that, the financial security of your family is also
secured as a result of a facility which is known as death benefit. Again
about 10% or so of your money can be dedicated to this sort of
4. Real Estate
A great specialty of the real estate is that the equity price of the real
estate is always on the rise, due to the shortage of land, against the
ever increasing demand. Investment in real estate can be done through a
mortgage which ranges anything from 10 years to 30 years. Your
expenditure would be the interest amount which would be charged at the
rate of anything from 5% to 15% of the total principle amount that you
have borrowed. Real estate, once purchased and the loan paid off, becomes
a very powerful collateral for loans such as student loans for your kids.
This is a good long term investment which can be used as an asset in many
There are some other equally helpful investment channels that can be
used. Gold and silver is one bullion investment, which has features
similar to that of real estate, i.e.: a rising demand yet, a limited
availability and supply, which leads to a guaranteed rise of their prices
in the long run. Further more for extremely secure investments you may
also consider all kinds of government securities, as they do offer a very
good rate of return and also prove to be a secured investment.
There are several other smaller investment options such as 401(K) and the
IRA. Even social security tax is also such an investment because in
future you can avail the benefits of Social Security Administration (SSA)
insurance policies. Apart from that commodities, Collective Investment
Schemes (CIS) and futures are some other options, that require quite a
bit of investments. I hope that the elaboration on best way to invest
money on 2011 is resourceful.