Investing is not such a simple task like many beginners believe. Indeed, it is not enough just to have a sufficient amount of money for investing and to find an attractive option for investment. There are many things starting investors are not aware of which can lead them into a serious trouble.
Actually, there are a number of possibilities available for investing which are not necessarily good for the beginners, whereas some of the options should be avoided by anyone. This article will guide you through the popular forms of investment which are not necessarily bad, but they are not advised to complete beginners.
Forex trading is still one of the most common forms of investment available to modern people and it has many fans. Some people really can earn a lot of money while trading on Forex, however, there is one crucial aspect you should understand which is the requirement for getting through some specific preparation for trading.
This preparation is the greatest problem in trading since many people who have come across amazing advertisements about the fantastic possibilities of Forex trading just develop an illusion of Forex trading being profitable just because one is going to invest. In the reality, it does not work in such a way at all and a person will require some knowledge about economical tools used for predictions of prices as well the knowledge about the history of the price development for a chosen type of assets.
Only if you gather such knowledge and will keep an eye on the current changes of any factors which can have an effect on the value of an asset, you will get a probability of earning money higher than fifty percent. Otherwise, the whole Forex trading experience for you will be just a casino game and you can imagine this is never a good way for managing your savings.
If you want to trade on Forex, you will need such knowledge.
Investing into cryptocurrencies
You have certainly heard about the amazing success of some cryptocurrencies such as, for instance, bitcoins. Those people who managed to buy this new type of a currency at the beginning when it just entered the market, are now very rich people as the record price of the currency was equal to 20000 USD in 2017. Undeniably, many people felt rather down realising they had a chance to get this currency when it was a way cheaper as well. Needless to say, many people want to repeat this success and there are many opportunities for it since the current market is not limited exclusively to bitcoins and it has abundance of various currencies to choose from.
You can come across a lot of negative information about cryptocurrencies which is certainly coming from banks and governmental institutions which are not enthusiastic about the advent of a brand-new type of currency featured by total freedom from various organisations. Anyway, no matter whether you believe in this criticism or not, you still should be careful about investing into cryptocurrencies if you have never done it before.
Just like it is in the case of Forex, you should gain some information on the dynamics of price changes for the assets you are interested in, however, in the case of cryptocurrencies it might be even more difficult to estimate the moment, when it is the right time to sell them. What you should know for sure is that albeit it might seem like a lucrative offer to invest in a cryptocurrency featured by a dynamic growth in its value, it is still not a good idea to do it when the value is already high. Just like it was in the case of bitcoins when people invested in the currency at the moment when the price for it had already reached 19000 USD and were confused about the right time to sell it.
Initial Coin Offering aka ICO
The idea of Initial Coin Offering companies is quite logic and it is working similarly to various start-ups developed for the money of investors. ICOs are pretty similar to this type of new organisations, however, they have their specific specialisation in cryptocurrencies. Basically, they are collecting money from the people who would like to get new cryptocurrencies and the raised funds allow such companies to actually start their work on the project.
As you can imagine, cooperation with such companies should take place when you have some idea about cryptocurrencies as it can turn out to be a fraud rather than a promising investment. One of the risks of participation in such projects is a situation in which all of the participants decide to sell their tokens at a time. This can cause a severe financial crises in such a company and there were many situations in which their owners just run away in order not to pay to their clients.