Term 1: Types of investment

Through many stages of development, new forms of investment emerged that created a vibrant business market. Each type of investment will have its own characteristics and advantages.

What will be the best method for each investor? Session 1 of the Thematic Intensive View on real estate investment will gradually help investors have a multi-dimensional view of the market as well as investment promising – real estate investment.

Classification of investment types

With the contribution of modern technology, investors have many channels to use their spare cash to profit. The capital can be borrowed, traded, exchanged or accumulated itself (money, gold, knowledge).

The paper temporarily divides investment forms into three forms: Ownership investment, lending investment and gold investment.

Ownership investment:

Ownership investment is a profitable investment form but also contains high risks. Investment ownership includes: securities investment, start-up business, real estate investment and antiques investment.

Stock investment is one of the forms of indirect investment in businesses. At the same time, investors invest in stocks in the market to gain certain benefits. Shares are certificates that certify that you own a portion of the company’s assets.

Stock investment is a form of indirect investment in an enterprise. Photo: Financial Magazine

This is a flexible investment channel that can be traded easily and quickly, especially with listed shares. Investing in stocks does not require large capital and everyone can participate. The advantage of this form of investment is the use of idle capital, quick profitability if timely investment, long-term vision and choose the right stock for investment.

However, the stock market often has unpredictable fluctuations due to many factors such as domestic macroeconomics, world economic turbulence, business performance, investor sentiment in domestic and foreign, capital inflows for investment and other political economic events.

Business start-up: You invest a lot of money in building and running a business as well as a form of investment. Starting a business is one of the hardest forms of investment because it not only requires a large amount of money, but it also depends on what your business product is selling with potential growth.

Antique Investments: Famous paintings, valuable ancient objects are also classified as investment ownership. However, this type of investor needs a huge amount of knowledge as well as large capital. At present, in Vietnam this form is much more about the interest of the rich than a form of investment seriously.

Real estate investment: Houses, apartments, houses for rent, houses for sale are all real estate investments can be profitable. Considered as a form of large and stable investment, high profitability, investment real estate with the participation of many parties such as brokers, land owners, government …

Loan investment:

This form of investment is more stable than investment ownership. Along with the risky, investment loans do not bring much profit. Loans include: savings deposit and bond investment.

Bank deposit: If you have an idle amount of money, do not want to risk investing and accept low returns, you may want to consider depositing money through interest rates. bank for profit. Often this type of investment need long term to be profitable.

Savings are safer, less dependent. However, the risk when depositing savings is the problem of inflation, resulting in a currency loss of some value.

Bond investment: Investors lend by buying on bonds that a company issues. In return, the company will return within the specified period and return the original amount at maturity. However, this form contains many risks such as interest rate, inflation, liquidity is not high.

Gold investment:

It can be said that gold investment is the type of investment that appears as soon as people start to consciously save and buy gold hoarding. This model is suitable for those who have capital but are afraid of risk when investing and do not find a reasonable investment channel.

Gold investment is a form of investment for those who do not.

Many people believe that there is a large amount of new gold investment. Conversely, if the capital is small, you can buy small pieces of gold after pay. By gradually accumulation you will have a significant amount of gold in hand. This is also the advantage of this type of investment when the capital spent less, comfortable investment time but still bring efficiency.

There are many different types of gold, including gold, yellow 9999, gold SJC … Each gold has different prices. However, the risk to invest in this form is that the price of gold on the market fluctuates, investors need to make decisions that should sell or should buy for the correct time.

What criteria to evaluate investment channel selection?

There are many forms of investment but there are four types of investment: gold investment, savings deposit, securities investment and real estate. These are popular types that many investors choose as well as bring high profits.

With these types of investments, investors have many channels as well as tools to “drop eggs” profit. However, the concept of “putting eggs into many baskets” is not quite right in investment. Your investment, capital, and investment options are different, so investing in multiple types of investments is unlikely to be successful. What criteria to help investors choose the appropriate investment form?

The investment form suitable for investors should meet the criteria of liquidity, profitability as well as risk, cash flow, investment amount, investment method, parties and circumstances. Investors.

Creditial:

Or the ability to convert money into a form of investment is considered to be the first factor when considering investment options.

Invest in gold and deposit low liquidity. While investors will find it difficult to buy or sell gold during periods of low or high exchange rates, bank deposits are more or less dependent on time deposits and interest rates.

Real estate investment is considered highly liquid, if not sold can be considered rent for immediate profit.

Securities are considered to have higher liquidity than the above two forms but are heavily dependent on interest rates and market fluctuations. Meanwhile, investing in real estate is highly liquid, if not sold can be considered for hire immediately.

Profitability, risk:

The second concern of investors is the profitability as well as the risk from their investment.

The two most risky investments, gold investment and long-term savings. In terms of customers, these two methods of long-term profitability, requires regular investment. This method is suitable for investors with idle money, risky adversity and low profitability.

Stock investments are also profitable for a long time, requiring long-term accumulation. The risk of this form is relatively high depending on the financial condition of the issuer of the bond.

It is a form of quick profit investment, real estate investment is hidden risky if meeting with investors without prestige, real estate market down, speculation …

Cash flow:

Cash flow is the movement of money into a business, project or financial product

In terms of this criterion, gold investment depends on the overall market price. Stock investment depends much on the business of the company. If the company develops well, the capital inflows are large and the money flows bring big and stable investors.

Like stock investment, savings deposit also depends on the business situation of the bank, the interest rate of the bank at the time of deposit. Investment in real estate depends on the developer of the project, the investor, the financial potential and the level of credibility of the parties involved. This is easy to verify through the projects they have deployed before.

Investment amount:

As discussed above, investing gold and stocks does not require too much capital and is very flexible in the amount of gold you want to buy.

For depositing money, investors also do not need a large amount of money in a moment, can split into multiple deposits. This method also has flexible deposit time.

For real estate investments, investors need large amounts of capital, mobilized in one go. However, many project owners now accept bank loans for repayment within the set time frame. This partly helps investors who do not have large capital.

Investment method:

Investment in gold, securities and real estate are all forms of buying and selling. These forms receive profit from the price difference. For saving deposits, investors rely on interest rates to make profits.

Participants:

This is also a factor in assessing the investment possibilities of the forms. When investing gold, the main decision-making power of the investor. Investing in securities or depositing money, investors will have to work with trading floors and banks.

Real estate investors often work directly with realtors to get the right project.

As for real estate, investors usually work directly with realtors. To make the right investment, you need to work closely and share commissions for real estate brokers.

Investors’ situation:

This also has a big impact on investors’ investment rdecisions. If you have a large amount of idle money, knowledgeable about the real estate market, the desire to profit quickly, the form of real estate investment will suit you. But if you are an adventurous investor with little capital, investing in real estate will be risky.

Thus, each type of investment has its advantages and advantages. In fact, with the support of technology and the development of mass media, the internal advocacy of the market, the type of real estate investment is being considered by many.

According to preliminary statistics from the Association of Real Estate Vietnam (VNREA), the fourth quarter of 2017 total transactions in Hanoi and Ho Chi Minh City. Ho Chi Minh City is estimated at 15,300 transactions. Of which, Hanoi is 5,959 transactions and HCMC. Ho Chi Minh City is 9,336 transactions. Last quarter, high-end real estate transactions are more exciting than the first quarter.

In particular, in the first 11 months of 2017, 4,500 real estate businesses were newly established, increasing 60% in number of enterprises and capital (figures from Department of Business Registration Management – Ministry of Planning and Investment private).

It can be seen, the real estate investment market is very exciting with many potential development. But with the potential risks, whether investing in real estate is safer than other types of investments? The answer will be in Session 2 of the topic entitled: Why should choose real estate investment instead of other forms of investment.

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