When an individual makes an investment, the hope is that it will grow over a period of time. When an investment grows, it is called a return on investment (ROI). However, not all returns are going to be the same. There are many different factors that can affect the return that an individual will receive.
One of the things that effects the ROI is the goals of the investor. If an investor is looking for slow and steady growth, annual returns aren’t likely to very high. Steady growth of 4% to 5% is a good rate of growth for a long-term investment. These types of investments are generally low risk, and are perfect for individuals who begin investing at an early age.
For people who begin investing later in life, returns will typically need to be higher in order to achieve the growth necessary for financial independence upon retirement. While these returns can be very robust, they aren’t without a few downsides.
One of the downsides is that higher returns require riskier investments. Another downside is that these types of investments can require a great deal of up front capital. In addition, an investor will need to have the ability to weather losses, as this is a common issue with high-risk investments.
Fortunately, there are a number of different investments that virtually anyone can make in order to get a good ROI. Standard investments, such as stocks and bonds, have been a favorite for many years. They continue to be quite popular due to their steady yield and ease of use. However, there are a number of alternative investments that can produce significant returns. These include currency trading, precious metal investments as well as mutual funds and ETFs.
For many individuals, maximizing ROI requires the help of investment professionals. As involved as some individuals may be in the various trading markets, it’s unlikely that the average person would be able to navigate their way through the many investment opportunities available. However, by working with a professional, they can determine which investments offer the right amount of risk, as well as the right ROI to reach their individual financial goals.
Whether it’s saving for a financially secure retirement, or investing for a living, expert advice is paramount. If you want to maximize your returns, it’s advisable to speak with an investment professional as soon as possible.