Novice Investor: A Guide for “Newbies”
Your savings are standing still, gathering dust, although you know they could generate profitability!… However, you are not a regular investor and do not know where to start. There are endless possibilities for your money to create profits, but what is the insurance? Which one is the best? There is no single answer, in this article we will try to help you land a little better in the investment world, and thus be able to consider the simplest direct possibilities:
Invest only the money you don’t need
Buy what you want, not what others want you to buy
Minimize your potential losses, use stop-loss orders if you invest in stock assets
Diversify investments, don’t focus on a single company or a single sector
First of all, the following concepts * are essential to be able to understand the movements of any commercial, investor or intermediary, and not stay in the attempt.
- Profitability ratios: they measure the performance of an investment, relating the benefits obtained with different magnitudes.
- Profit: the difference between income and expenses of an investment.
- Goodwill: gains generated by an increase in the market price of a security.
- Risk: level of uncertainty about the evolution of an asset, it indicates the possibility that an investment offers a different return than expected – either higher or lower.
- Asset: the set of assets and rights of a company or person, both what is owned and what is owed.
- Commission: charged by one of the parties in a negotiation or investment as remuneration for any services.
The stock market
Investing in the financial market is the first option for most people. However, you should keep in mind that if you want to be successful, and not just keep your money, you need dedication and follow-up on the current market.
Instead of investing in a company indirectly through an intermediary in the Stock Market or stock market, you can also choose to get a percentage in shares of a company directly, small or medium and with a potential upward projection.
The Real-estate market
The real estate market is one of the best and most demanding options for savers and investors who want to see their capital increase easily and at any type of term. We also have several ways of producing profits, in the same sense that happened with the purchase of assets:
- Through the rent paid by the tenant, fixed, secure and long-term profitability.
- Through the capital gain between the purchase and sale. Often you invest in a renovation or refurbishment when you buy that increases the last sale value. For example, if, in addition to the purchase of the premises, we invest an amount in a reform that improves its image and conditioning, the new market price will have increased considerably more than what we have invested in the reform. Thus increasing the capital gain and, therefore, our profit in the operation.
Real estate sectors
- “Real estate sectors and their profitability“. Access this in-depth article on investing in the different real estate sectors to learn more.
There are many sectors depending on the type and use of the property, and each one enjoys its own supply and demand, and consequent profitability. Always subjugated to the conjunctural state – upward, or downward; stable, or unstable – of each market:
- Residential: the most common sector and closest to the general public, working with all types of homes.
- Offices: office assets are a value that must be supervised and controlled by companies, many choose to do business and real estate management with their own offices.
- Commercial or retail premises: retail assets in the most commercial cities are a great opportunity for the exploitation of a business and for real estate investment. Agents, owners, investors and operators bid for the best opportunities in each city.
- Hotels: the opportunities in this sector involve a complicated combination of variables and exhaustive knowledge: location, tourist offer, services, hotel management and much more.
- Industry and logistics: with the explosion of demand generated by eCommerce or electronic commerce, logistics warehouses have become fashionable and are attracting investors, in addition to, of course, new and more tenants.
In Marbella WOHNEN Immobilien we are specialists in the real estate market. We advise based on expansion, marketing or investment needs.
You can easily reach us by phone during business hours (M-F, 8:00 a.m. to 8:00 p.m.) by calling +34 952 632 608, or if you prefer by email.