Tuesday, May 15, 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.

An investment is a gamble, in essence, just without the social stigma. Capital is expended in the hope that doing so will result in more money. Of course, like gambling, things can go wrong and you can end up broke. You can win, but there is no guarantee of that.

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.

Profit is a lot like the head of a needle in investing, in the sense that it is the point. The primary goal is the acquisition of wealth, at any level. Not every investor will achieve said goal, but all will try to do so.

In the investing game, reward requires risk. As such, the mindset is that riskier opportunities can reap a greater return of investment. However, this mindset is contradicted by objective data that shows that low volatility investment often has better returns than riskier peers.

There are many different types to choose from. Some investors purchase stock in a company, trusting that the company will profit and that the value of the shares will increase. Others purchase land and develop it for commercial use. Some can start a business. Others have a panoply of investments that includes different kinds.

There many ways to begin investing. Some would be investors go through a bank, as many banks have programs. Others go a broker. There are also some who hire a business manager, someone to handle all the heavy lifting when it comes to investing. Other people invest independently, purchasing and selling shares without the support of a third party or a middle man. Many companies will allow an employee to use a portion of their paycheck to purchase stock.

Investing can come riddled with problems. It can also be daunting. Nerves can be racked while trying. But making a fortune drives many to do it, to go forth into a marketplace where there are no safety nets against utter failure and hope that it all works out in the end. The mere possibility of success is enough to drive some people to risk it all, and it is enough to drive many to risk some. But as in any worthwhile endeavor, a little bit of patience and foresight can go a long way to insuring success.




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