A competent investor should always know how to manage his funds. We have prepared for you 7 financial instruments in which you can invest currency in 2019.
Here, there will not be any FOREX, CFD and binary options, because we sincerely believe that other than losses, they will bring you nothing good in 2019.
One of the few tools with a fixed income.
There are 3 types of bonds: state, municipal and corporate. In government bonds, the Ministry of Finance is the guarantor of the payment – they are the most reliable. In corporate bonds, the guarantor of the issue is the company, see the credit rating from rating agencies.
Bond yield = coupon + difference between face value and purchase price. The larger the company, the smaller the coupon, but the more reliable the release.
The price of a bond is shown as a percentage of the nominal, for example, at a terminal price of 99.5 and a nominal value of $1000, you will have to buy one bond for $995. The average yield on foreign currency bonds is 4-8% per annum. In the Franklin Investor School, the Bonds topic is disclosed in lesson number 3.
Shareholder income = dividend + rate change. Dividends are paid under two conditions: 1) if there is a net profit; 2) the meeting of shareholders directs it to pay dividends. Shares on the stock exchange can be bought only through a stock broker (he must have a license), he will help you open a securities account on which these shares will be credited. Do not confuse trading CFD for stocks and stock trading!
In the case of CFD, you buy a “dispute” with who sells it to you, and not an asset like in the case of stocks! When buying stocks, pay attention to the trend in the market, try to buy stocks when the market is in an uptrend. During the market downfalls, you can earn money on this by borrowing shares from a broker and selling them (this is called opening a short position), an additional commission is taken for it.
In the fourth lesson of the course, we give three models for buying a stock (the beginning of the trend, the CP point and the moment close to correction-> reversal).
ETF (Exchange Traded Funds) – these are funds whose shares are traded on the stock exchange, and their portfolio repeats the movement of a certain index or it contains shares of companies from a certain industry. The funds of the investors in the ETF are managed by the management company (MC), which charges management fees for its activities (based on the strategy, the commission is different, with Passive it is lower, with Active it is higher).
The main advantage of the ETF is the diversification and the focus of investments. The most popular ETF is traded under the SPY ticker, its movement repeats the movement of the S&P500 stock index, and to buy 1 share you need approximately $200-250 instead of hundreds of thousands of dollars you would need to create a portfolio of shares repeating the movement of the S&P500.
By buying shares of inverted ETF you can earn on the market downfall. A tool for choosing ETF is available on the website: etfdb.com/screener. The topic of ETF is devoted to lesson number 5.
IPO (Initial Public Offering) is the initial public offering of a company’s shares on the stock exchange among a large number of private investors. After the IPO, the stock begins to trade at the market price and the company gets a rating – market capitalization (MCap).
You can buy stocks at the pre-IPO stage cheaper on the over-the-counter market, or take part in the IPO itself and get shares at a nominal price, and then sell them at a higher price, against the background of general excitement. The topic of IPO is devoted to lesson number 8.
One of the markets where you can do this is the Nasdaq Private Market. Usually for those who bought shares before the IPO, a lock-up (a ban on the sale of shares) is set for 3-6 months from the start of trading.
The main criteria for evaluating a company before an IPO:
1. The trend in the market as a whole – the market must grow
2. The trend in the industry
3. IPO of similar companies
4. Financial performance of the current company in the dynamics (revenue, profit, number of customers, etc.). The largest companies that plan to enter the IPO in 2019 are AIRBNB, UBER, LYFT, SLACK, PINTEREST, ZOOM, PELOTON
The main financial instruments with which you can earn on the growth of the price of gold:
Method 1. Buy shares of companies that are engaged in gold mining.
The three largest corporations in the US market:
– Newmont Mining Corporation (NEM ticker)
– Royal Gold, Inc (RGLD ticker)
– Jagged Peak Energy Inc. (JAG ticker)
Method 2. Buy shares of ETF funds owning gold bars.
The three largest ETF funds in the United States:
– SPDR Gold Trust (GLD ticker, management fee 0.4% per annum)
-iShares Gold Trust – (IAU ticker, management fee 0.25% per annum)
-Aberdeen Standard Physical Swiss Gold Shares (ticker SGOL, management fee 0.39% per year)
Method 3. Buy gold futures in the USA:
– ticker GC (CME Exchange), the minimum lot is 100 troy ounces (~ $130 thousand), the minimum fluctuation (tick) is $10 per contract;
– Mini Gold ticker QO (CME Exchange), the minimum lot is 50 troy ounces (~ $65K), tick $5;
– Mini Gold ticker YG (ICE Exchange), the minimum lot is 33.2 troy ounces (~ $42K), tick $3.32;
To buy futures you need to make a guarantee (Margin), it is usually 5-10%.
You can also buy three-month gold futures under the ticker GOLD on the Moscow Exchange.
Method 4. Buy digital shares of gold issued on blockchain (tokens).
For example, you can buy Digix Gold Token (DGX) tokens for cryptocurrency and own a share of the gold bar that is in the Digix company storage in Singapore. Storage fee: 0.39% per year. The topic of investment in gold is devoted to lesson number 9.
6. Structured products
The structured product usually consists of two parts:
a) One part of the capital is invested in a very reliable asset with a previously known yield;
b) The second part is invested in a risky asset with a potentially high yield. This way you get completely manageable risks and investment protection. An example of a structured product without risk: 95% is invested in bonds with a yield of 8% per annum, all future profits from the
coupon (2.6%) are invested in options on the stock index with a risk of 100%. The total risk of the portfolio = 0.
Structured products are issued by brokers and banks and sold to their customers as one of the tools for investment.
In conclusion, the structured product is a good tool for those who have little time and do not want to understand the intricacies of investing. The topic of structured products is available in lecture number 6.
There are a lot of cryptocurrencies, but the most popular is Bitcoin (BTC), which appeared in 2009, but started to gain popularity all over the world only in 2017, when it grew from $1,000 to $19,000, and to enjoy great popularity among the press.
However, in 2018, the price of Bitcoin also rapidly collapsed to $4,000.
Bitcoin is a digital currency that unites millions of people around the world, and serves as a medium of exchange and payment. Bitcoin can be compared to digital cash that is transmitted almost instantly and without intermediaries. Since bitcoin emissions are limited, it is likely to increase with the growing demand for it. Cryptocurrency is stored in a special cryptocurrency wallet.
You can either install it on a computer, or on a phone (convenient multi-currency wallets are Coinomi, Exodus, Jaxx), or you can buy a special “cold storage” device (such as Ledger Nano, Trezor, Keepkey).
Where to buy Bitcoin and other cryptocurrencies:
1. Through a cryptomarket by opening an account there. The full list of cryptomarkets is at coinmarketcap.com
2. Exchangers,you can find their ratings on bestchange.ru
3. The site localbitcoins.com where members place ads for sale from the first person.
The most important thing when you buy Bitcoin is to remember that a cryptocurrency is subject to significant fluctuations and does not have a “book value” in its usual sense, i.e. its price depends only on the ratio of supply and demand.
Also in 2018, bitcoin futures have appeared on the CME and CBOE exchanges. In lecture number 10, the topic of investing in cryptocurrency is thoroughly analyzed by us.
In conclusion, regardless of where the markets will move, in any case you will be able to earn on them in the long term, as long as you will comply to two main rules: diversification and regularity.