Do you have money available? The investment bodies will already do everything to get it in their hands in one of their investment channels: open a mutual fund for you that monitors the blockchain industry or showcase the wonders of return in the cyber worlds. The problem is that the lack of knowledge and understanding of most of us in investing will be quickly replaced by greed, which will steer our imagination into the realm of replica yields and our bank account for deviation.
For example, some of our investments in funds that followed the cannabis companies, in Israel and abroad, almost completely eliminated the money invested in them, with declines in some of which deepened to 75%. This does not mean that they will not return, That he would try his luck at the casino.
Still: If your training fund has been released, you have received a surprising bonus for the end of the year, the employer has redeemed you accumulated vacation days or inherited a modest amount – and after hearing how successful your neighbors, friends or colleagues are with investing in the capital market, you decide not to stay out “celebration”.
It should be noted at the outset that in the absence of an understanding of the various tools and areas of investment, it is advisable to contact the investment bodies licensed by the Securities Authority, so that they will make the actual investments for you, and especially match the chances of the risks you are willing to take.
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If you did not go for this institutional option – and like many self-taught people you have decided that what the investment advisor knows you can learn from the economics sections, then why pay a commission – here are some data that can help you earn without having to pay commissions. Just before we set out we will make it clear that tuition can sometimes be more expensive than any commission.
You have already sat down in front of the computer at the self-school you set up and started to examine in which areas you should invest. In front of your eyes are articles that tell about three-digit returns in exotic areas such as green energy, fintech and even crypto.
On the one hand it is exciting. On the other hand, this is the stage where you start sweating, especially at the stage where you have to press the button that will divert your money. That you know exactly what its conversion value is in the supermarket, the appointment to the country or in the clothing store, to a field that is new to you.
Therefore, let us present the joint venture of Walla Money and Maariv Business, at the end of which you will perhaps understand a little more about investments, especially the fact that investments are work for all intents and purposes, and it is worth specializing and understanding what to invest or leave it to professionals.
Where’s the money?
We decided to examine an imaginary investment of NIS 20,000 over the course of a year, which will be divided between ten investment channels (see table): six indices that mimic the main markets in the world, along with four types of currencies.
The first investment we have decided on is in the areas of technology, which is mainly expressed through the Nasdaq 100 index, which contains the 100 largest technology companies in the United States. The index has risen by 33.67% since the beginning of the year. The decision to invest in this channel stems from estimates that technology companies will continue to grow and lead the world capital markets, and the US in particular. This is also against the background of discoveries of additional variants to the corona, along with increasing morbidity in Europe, which is tightening measures against the outbreak.
The second channel chosen is the S & P500, which contains the 500 largest companies in the US. The index has risen by 28.5% since the beginning of the year, and investing in it expresses confidence in the continued growth of the US economy and capital market.
Alongside them were the MSCI World Index, which tracks developed world markets, which has risen 17.3% since the beginning of the year, and the DAX, which tracks the 30 largest companies traded on the German Frankfurt Stock Exchange and symbolizes Europe’s economic strength – which has also risen 13.8% since the beginning This year. Both were selected in favor of diversifying investment versus U.S. targeting, and on the assumption that post-corona recovery will lead to relatively high growth in these regions of the world as well.
The emerging market in the world, China, is also represented in our investment diversification, with the Shanghai Composite Index examining the state of the huge economy from the East, and when the index rose by only 2.6% over that period.
The Tel Aviv 35 Index (formerly the Maof Index), which tracks the 35 shares of companies with the highest value on the Tel Aviv Stock Exchange and expresses confidence in the growth of the Israeli economy, has risen by 24.7% since the beginning of the year.
Prof. Dan Amiram, Deputy Dean of the Faculty of Management at Tel Aviv University, favors investing in indices, especially among novice investors.
“An academic examination of the history of investments,” explains Amiram, “shows that even the most sophisticated investors fail to achieve a higher return than that achieved through long-term investment in the key indices.
“Although your exam focuses on a relatively short period of time, of only one year, it does not matter to the unskilled investor, who even can not face the sophisticated investor who has many abilities and information. The advantage of investing by tracking indices is that no investor has an advantage over On the other hand, the very investment in a central index disperses the investments between the various companies traded, without ‘betting’ on one or two companies.
“If you want to spread the investment even more, you can choose more than one investment index, and thereby spread the risk inherent in the investment between different geographies and even different sectors.”
Along with the indices, we also examined investment in the dollar and euro currencies, which yielded a negative return from the beginning of the year, which stood at 1.5% – and 8.9%, respectively, and the virtual currencies Atherium and Bitcoin, which jumped by 500% and 89.6% for the same period, respectively.
Investing in virtual currencies, it should be noted, is considered more speculative and risky than investing in indices.
“Especially for investors who do not know and understand the nature of investing in currencies and the volatility that accompanies it,” explains Amiram. “Because unlike fiat currencies (a financial system in which the value of money exists under state law), there are still no accepted models for estimating a change in the value of virtual currencies.”
In parallel with the monitoring we conduct here of the performance of the funds, funds, or shares of one sector or another, we will continue to monitor the 20,000 shekels we have distributed in these channels – and occasionally publish an update that may answer the question: what is higher, management fees for professionals or personal tuition ? Hopefully we will become such.
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