One of the most relevant practices in the world of personal finance is investment. Many people may wonder why they should invest their money instead of keeping it in a savings account or spending it on goods and services. Next, I will briefly and simply explain the importance of investing your money, the advantages it offers, the risks involved and some useful tips so that you can embark on the exciting world of investments.
One of the main reasons why you should invest your money is to protect it against the devastating effects of inflation. Yes, you read that right! protect against inflation. Despite the measure that caused a 22% devaluation the day after the STEP, those who were invested had the possibility of protecting their capital and mitigating the terrible effects of that devaluation. The instruments that allowed this to be done are varied, from common investment funds linked to the dollar, through Bonds and ON’s, as well as shares and CEDEAR’s. Regardless of the instrument used, those who were invested were able to have coverage and prevented their capital from being liquefied.
Another significant advantage of investments is the ability to generate passive income. By investing in assets such as stocks and bonds, we can receive periodic payments in the form of dividends or income (coupons). This income can provide you with an additional source of money, which will allow you to reach new financial goals more quickly and increase your financial freedom.
On the other hand, a smart investment also provides the opportunity to grow our wealth in the long term. Through investment in shares or other financial instruments, we can participate in the growth of companies and benefit from their profits. If this is done with a solid strategy based on a suitable time horizon, the investment can multiply our money and help us achieve financial independence.
It is true that investments carry risks, which is why it is necessary to manage risks effectively, as well as the possibility of diversifying our investments. By spreading our money across different asset classes, sectors or regions, we can reduce exposure to specific negative events and mitigate the effects of market volatility. Smart diversification can help you protect your capital and optimize your returns.
Recent events have shown the importance of being invested in instruments that mainly provide us with liquidity, that is, the possibility of having our money in a short time. In this sense, time is an asset as valuable as money.
While investing carries inherent risks, the key is to educate yourself, set clear goals, and follow a strategy. If there is one thing that these STEPs made clear, it is that the greatest risk of all is not taking any.
Remember that you don’t have to do this alone. An advisor can help you identify your investor profile, and thus work with the instruments that best suit that profile.
Contact information:
Email: [email protected]
Ig/Fb @finanzas.efragapane
In: in/emanuel-fragapane
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by CEDOC