Fundamentals of Investing

First of all, we would want to separate saving from investment.

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While investing uses that money to purchase assets, such as shares in companies or real estate, saving is stashing all your cash in a bank account. Though you could already be a conscientious saver with a handy little pot of cash, over time inflation will devaluate those savings.

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Every dollar, euro, pound buys less goods—be it toothpaste, jeans, or even a super-secret lair to keep your luxury yachts! Inflation means this. And such losses develop gradually over time. For instance, a modest 3% inflation rate over about 25 years will reduce the value of your cash.

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Investing then comes in really handy. Investing is really about trying to consistently increase your pot of money. With time, maybe, the somewhat modest annual increases add to something rather amazing.

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"I started rather small." I purchased items I knew and understood, things I utilised on a daily basis. At the time, I bought a lot of Nike shares since I worked for the company. I acquired Starbucks stock and used to sip their beverages. I just bought a small bit when I had money and neglected it when I didn't.

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— Mark, Markelitics team

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One item you will have to come to terms with is risk. Your nest egg might go down as well as up. Greater risks, however, provide greater rewards.

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For many investors, the objective is basic. To stop inflation erasing their money.

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Our aim is to equip you with all the tools and knowledge required to become financially astute as well as to access the investment universe.

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And hunch over what? Just a few minutes every day will be needed! Thank you very much; another point is that there won't be any tiresome jargon here. 

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Three golden rules for making investments

Investing's foundation consists on three golden rules.

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But unlike Dua Lipa's guidelines, our regulations are old rather than fresh. (While we have to agree with Dua that, should you are under him, you are not overcoming him.)

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Golden rule #1

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The first rule of investing is all about juggling risk and return. An investment paying a good return is almost definitely more risky than one paying a nominal return. That is life. Apologetic. The profit is really payback for you accepting that risk. Be extremely dubious if someone tells you they are making a fantastic return on a sure thing investment. You have to determine the degree of danger you would regard reasonable. Generally speaking, you ought to be able to withstand more risk if you view the investment as a long-term project. You will have more time to bounce back from whatever temporary losses.

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One of the things my mother constantly urged me to do was to take chances. I like to be a risk taker. Perhaps it is overconfidence, but I believe it to be the appropriate amount of confidence. What I am investing in makes sense.

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Jesica Markelitics Team

Golden rule #2

The second rule is based on liquidity. Many investments call for you to lock away money where it's difficult to reach or where you might find difficulty selling quickly. These are said by professional investors to be illiquid. Actually, this means that always having some cash on hand for a crisis is a smart idea. Most financial consultants advise the emergency reserve to be roughly three months' salary.

Golden rule #3

The third and last rule is to appreciate the amazing results of compound interest. Let us use an example here. Should you have paid $100 for an asset yielding a 10% return? One year would have you with $110. After the second year, you would be sitting on $121 since you would collect interest on both the original $100 and the $10 interest from the first year. And you would have accumulated an amazing $259 if you left that $100 alone for ten years. Your fund will expand dramatically over time since the returns stack on one another every year. 

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