Let's talk about another fundamental and very important topic - assets and liabilities. If you have read Robert Kiyosaki, then you will understand me perfectly - there is an opportunity to refresh your knowledge, remember what you once read, think and start acting (if you have not already started).
Definitions of asset and liability
According to Kiyosaki's definition:
- an asset is something that brings money into your pocket
- a liability is anything that takes money out of your pocket.
Hence follows important rule: buy assets and get rid of liabilities. The statement is so simple and even banal that one can not even pay attention to special attention such a "trash". However, today we will consider this in more detail, because there is a lot in this simple phrase. Rich dad told young Kiyosaki that this is all you need to know to become rich.
But, as you know, the devil is in the details.
You need to clearly know what is an asset and what is a liability. Very often people confuse these concepts, taking one for another.
Assets - what brings money into your pocket, that is, generates cash flow(cashflow - cash flow). Or it is what you have and that in the future you plan to sell and get more money for it than you spent.
What can be an asset?
1. Real estate, leased - it generates cash flow to its owner.
2. Stock that you bought on long term(buy & hold strategy - buy and hold) - in addition to the fact that dividends are periodically paid on shares, for long periods of time, a portfolio of shares successful companies grows in price, which means that in a year or 5-10 years the shares can be sold and earn a considerable profit.
3. Any other things, leased and bringing money to their owners (for example, a car, equipment).
4. Shares shares investment funds(mutual funds)
5. Deposit in the bank
However, the house (apartment) in which you live is NOT an asset, as many mistakenly believe, because this housing does not bring you profit. On the contrary, you pay the rent, buy the furniture. Therefore, in this case, it is a liability.
Also, your personal car is not an asset, since it not only does not bring money, but also requires maintenance (gasoline, repairs, fines, etc.) - it is a liability. However, if you rent your car and get paid for it, or let's say you work in a taxi and make money with a car, then it can be considered an asset.
Liabilities - something that takes money from us. For example, we pay for the apartment in which we live. We spend money on gas and maintenance on the cars we drive. We pay interest on bank loans. All of these are passives!
Balance of assets and liabilities
However, it will not be possible to completely get rid of liabilities. Or you will have to greatly lower your standard of living (how do you imagine living without a home?) The trick is to maintain a reasonable balance between assets and liabilities. That is, you do not need to strive with all your might to acquire all kinds of luxury items (liabilities) that will pull money from you. If you look around, you can see a lot of people who do just that - live beyond their means. On the contrary, you need to know when to stop and not get involved in the financial bondage of loans.
A financially intelligent person will not seek to increase his liabilities (as most do), but rather reduce them and acquire assets, because he is sure that the assets will make him rich. Look at the billionaires - they are all owners of shares, real estate, enterprises, factories, oil rigs — all these assets, but on a different scale. Assets allow you to achieve financial independence, when no longer a person works for money, but money works for him. By acquiring assets, we are approaching the fact that we no longer work all our lives for money - the time will come, and our assets will already work for us and provide us with a comfortable existence.
Of course, rich people can afford to keep liabilities in the form of a country mansion, a prestigious car, but this is due to the fact that income from assets allows them to do this without any damage.
If you only have a job as an asset, and borrowed money as a liability, you should think about where, in which direction you are going, to wealth or in a vicious circle of poverty “earned - spent”.
Assets generate income, liabilities generate expenses.
Assets and liabilities - what is it? Despite the seeming simplicity, for many, these two concepts cause difficulties, and for others, this is something from the field accounting. In fact, everything is not so scary. Your material well-being directly depends on how you distribute the ownership of assets and liabilities.
So what are liabilities? And what are assets?
We will not go into the wilds of scientific financial definitions and terms. Let's formulate everything very simply and clearly.
Assets are what bring you money.
Liabilities are what take your money.
Types of assets and liabilities
Assets
Assets include all of your financial investments, which:
- generate constant financial (passive) income
- and/or increase in value over time.
There are actually a lot of assets. Here are just the most famous and popular:
- bank deposits. Money invested at interest in the bank and making a profit.
- Bonds. Profit is generated from coupon income accrued in certain period time. Usually once a quarter or six months, a year. By purchasing long-term bonds, you can create a permanent source of income for years to come.
- Stock. Here we can make a profit in two directions at once. First, buying shares is buying a piece of a business that will increase in value over time, which means that the value of your shares will also increase. Second, buying dividend shares, you are entitled to an annual distribution of profits, in proportion to the shares you purchased.
- Real estate. Almost the most reliable way to make a profit. By investing in the purchase of this asset, you guarantee yourself a constant cash flow from rental income. And the value of real estate itself is only growing from year to year. There is a similar picture of income generation here, as well as from the purchase of shares.
- mutual funds and other investments. Assets for the lazy. Suitable for those who do not want to rack their brains over the question: where to invest their money? You put your finances under the management of professionals who have a much greater knowledge of financial instruments, and therefore can use your money more efficiently. Of course, not for nothing. They have to pay a certain percentage.
- Borrowed money. This is also an asset. Of course, if you borrow not for nothing. Do you have a financial interest? Otherwise, you have not an asset, but a liability.
- Buying assets that will increase in value over time. What are these assets? Gold, silver and others precious metals. Collectibles: paintings, stamps, rare coins. In general, everything that is constantly growing from year to year.
Liabilities
- Mortgage loans.
- Consumer loans taken for the purchase of things, travel, entertainment.
- All your movable and real estate(apartment, car, Appliances, gadgets, things, etc.). Yes Yes. Everything you own and use Everyday life, is a liability.
- Borrowed money. Even if you were loaned out of friendship, given that you only need to repay the principal amount, without any interest, this is also a liability.
For a better understanding, let's take an example.
Let's say you suddenly became the owner of 3 million rubles. It doesn't matter where. Fell from the sky, won the lottery, found on the street, inherited.
How can they be managed?
You can buy an apartment with this money. In a good area, in good condition. In general, liquid real estate, for which there is a constant demand and which, if necessary, can be easily rented out or sold over time without any problems.
After you bought it, you rented it out for 15,000 a month. This is 180 thousand rubles a year. We remove the utility bill and other current payments from this amount - we get about 140 thousand a year.
By purchasing this asset (real estate), we generated a monthly fixed income in the form of rent. Those. the asset will bring us money.
But this is not the most important thing. There is an invisible tax in the world called inflation. Those. every year, thanks to her, everything in the world becomes more expensive. And real estate is no exception. Usually the growth on it is 15-20% per year. Even if we take a modest 15% increase in value per year, then after 3 years, your apartment will no longer cost 3 million, but 4.5 million. Those. in 3 years you will become richer by 1.5 million.
And the rent will only grow every year.
If you sum up the total income from appreciation and from renting out, we get that in 3 years you will become richer by about 2 million.
And it could have been done differently. Many people adhere to the principle of money “easy come, easy go” in life. You think the same. And with the money that suddenly fell on you, they decided to buy an excellent (expensive) car for 3 million. As soon as you left the car dealership, the car will immediately lose 10-20 percent in price. Add here annual expenses for insurance, parking, car wash, gasoline, Maintenance, tuning and so on. At least 300 thousand a year, this car will pull from us.
And if after 3 years you decide to sell it, you can get about half of its original cost for it. Those. in 3 years you lost 1.5 million. Plus, every year of its operation costs you about 300 thousand, for 3 years it is about a million.
In total, 3 years of car operation will cost you 2.5 million.
In the first case, when we invested money in an asset, we received 2 million, and in the second case, when we bought a liability, we became poorer by 2.5 million.
Of course, these are the 2 most extreme cases. But I think it is on such contrasts that it will be easier for you to understand the difference between liabilities and assets.
What to do with assets and liabilities?
Of course, in life one cannot do without liabilities. Our whole life practically consists of liabilities and it is impossible to completely eliminate them. Clothing, food, technology - this is what we use every day. The main thing here is to find a balance. It is necessary to strive to ensure that the profit received from assets exceeds the costs of liabilities.
Of course, every second you will not be able to change the situation. This is not a fast process. Takes many years.
To start:
- Determine the size of your liabilities, i.e. your current needs or monthly expenses
- See what can be left out, or something can be cut back. Let's say you spend too much money on entertainment (restaurants, clubs, etc.), or on the purchase of not particularly necessary or expensive things.
- Now define your assets. Those. that you bring money. What monthly cash flow do they bring you.
- Now compare the difference between your assets and liabilities. Those. how much money you spend and how much money your assets bring you.
- you need to strive to ensure that the income from assets exceeds your expenses from liabilities.
Assuming to begin with, set yourself the goal of reaching an income from assets in the amount of 10% of your liabilities. Further by 20%, etc. Break the big goal down into many smaller ones. So you will be the result of your small achievements and constantly move forward.
An asset is anything that can bring financial resources. A liability, respectively, is everything that takes this money away. As many economists calculate, in order to become rich, you need to get rid of liabilities and buy assets.
Yes, this is a simple formula, but if you figure it out, then this is how it is.
Many people who are not familiar with economic theme quite often these concepts are confused, but if you figure it out, it is not at all difficult to realize their differences, since these are completely opposite definitions.
To answer the question of how to buy assets, you need to understand for what purpose they need to be attracted to yourself, and on the contrary, move away from liabilities as far as possible.
In simple words, it is possible to say that an asset is a generation financial flow, in other words, the sale of what you have.
What is possible as an asset?
The following things can act as an asset:
- Bank deposit;
- Real estate that is on lease;
- Stock;
- Other items that are rented for profit can be cars, personal items, clothing.
But the apartment and car where you live is a liability. because you invest in these things yourself, take care of them and spend money on their maintenance. And, for example, if you work in a taxi in your car, then it acts as an asset.
A liability is something that can take money away.
A couple of tips on how to buy assets will be outlined below. If you have chosen real estate as assets, then it is more optimal if these are foreign assets, from which it is possible to take more big income. It is only necessary to choose a country wisely, it is worth remembering that, first of all, it must be economically developed.
If you learn everything from you, then it is possible to acquire rental income up to thirty percent per year.
If you do not have enough money to buy a home, then it is possible to buy it on credit, cooperating with banks in other countries, in practice it shows that there are better offers for customers in that place. But if this option does not suit you, then it is possible to buy real estate under construction, and at the time when the time comes it is profitable to sell it.
A good income will bring shares of developing companies, it is only necessary to first study this area of the market.
If you want to work with assets, but do not have the opportunity to buy them, you need to start saving for them. Every wages it is necessary to set aside ten percent for investing assets. At first glance, this may not seem profitable, but in practice it brings a good income.
It must be remembered that only those who invest huge amounts of money in them will be able to get huge money from assets.
It is more important to think about your money once a month
than 30 days to earn them.
J. Rockefeller.
Friends, we have already introduced you to. I hope our initial tips will help you find the 10-15% difference between your income and expenses in order to start saving and investing. In this step, we will look at how to make your free money work. But before each of you can answer the question of where to invest in 2015, let's analyze the basic investment options and compare them with each other according to a number of criteria.
Let me remind you that we have already introduced our classification investment instruments by type of risk and level of return:
Today we will make more detailed map financial instruments. Let's learn about the new options. Such as liquidity, starting amount, additional costs associated with investments. Let's break down the investment methods so you can figure out what's right for you.
So, where to invest in 2015?
1. Bank deposits.
The very first and most understandable investment instrument for most people is a bank deposit.
Difficulty / activity: The easiest and most affordable investment tool for everyone. No activity is required from the investor; now, in most banks, deposits can even be opened online.
Yield: Low. By low yield, we mean such a level of rates that only allows you to save money from inflation, but not to increase it.
Income Predictability: 100%. You see the bet before the trade starts. Rates, as a rule, do not change during the term of the contract.
: High. High liquidity means you can withdraw your money at any time.
starting amount: from 1000 rubles.
Additional costs: usually not, but they can give you debit card, for which there will be a paid service or to which an overdraft will be attached. Here is the advice - come to the bank for a deposit, ask only for a deposit - check everything else and ask how much it will cost, even if they immediately say that it is free.
An airbag is a reserve in case of job loss or other problems, using which you can live peacefully for several months. It is better to form such a reserve on deposits, because with other assets there may be problems with the prompt withdrawal of funds.
Intermediate storage. For example, you save up for a car or an apartment, save 100 tr. per month. You have 4 months left to reach the required amount. You are simultaneously looking for the right asset, and the money is on deposit. In any case, it is more profitable than storing them at home.
It is also easiest to apply the currency diversification rule to deposits. It is enough to open a multi-currency deposit or 2-3 deposits in different currencies. It is worth paying attention to the fact that inside such a deposit you can move money only at the rate of this bank. For example, I once had a similar contribution in Svyaznoy, the courses in which were not the most profitable, it was a shame. :-)
Consider other investment tools.
2. Shares.
Difficulty / activity: High. The tool is more for professionals. Even if you are a long-term investor and not a trader, you need a lot of activity to keep abreast of current events. Personally, it takes me from 30 minutes to 1 hour a day to read relevant news, view quotes and other information analysis. Despite the fact that I do not consider myself a trader, but I am engaged in medium-term investments. Active trading means full time just this business. This is a profession.
Yield: Can be quite high. Prices for individual shares can change by 1000% per year. In general, for the Russian stock market, for example, the profitability can be estimated as follows: over the past 10 years from 2004 to 2014, the MICEX index ( average cost shares 50 Russian companies) increased by 2.5 times. Those. roughly speaking, growth was 25% per year from the original cost of the asset.
Income Predictability: No predictability. Tomorrow the directors of the company may be imprisoned and the shares will depreciate 10 times. The mine, for example, will collapse and the course will also fall rapidly.
Liquidity (the rate at which you can get money out of your asset): Relatively high. You can withdraw money from Russian sites the next day. If you trade on foreign sites, as a rule, two broker companies are involved there - Russian and foreign. Deposit/withdrawal of funds may take from several days to a week. In addition, if you urgently need money, there is a risk of losing a lot on the difference in the exchange rate, since there is a risk that it will not be the most profitable on the withdrawal date you need.
Risks: High. Both general systemic risks (the economic situation in the country, etc.), and separately for a specific security (here, the risks associated directly with the issuer's enterprise).
starting amount: There are shares and 6.7 kopecks, for example, this present value VTB shares. But the minimum lot for the sale of VTB shares is 10,000 shares. At the same time, a more significant limit on the amount is not even the cost of one share or lot, but commission expenses and the threshold amount for entering the market with the broker company through which trading will be carried out. As a rule, this is 30-50 tr. lower is also possible, but it does not make sense, since the commission will be too high compared to the turnover.
Additional costs: May be significant. These include - the broker's commission from each transaction, subscription fee behind software(separately to a computer, separately to a tablet or phone), increased commission for making transactions by phone, etc. Professional players still have paid access to analytical sites, etc. But you can get by at least, for example, if you bring 100 tr to the exchange. and make 1-2 transactions per month minimum commission will be an average of about 2.5 tr. in year.
Diversification long-term investments, in cases where money is not needed by a certain date, but there is a task to make it work.
Often stock market becomes a haven for capital when there is nowhere to run. For example, in current situation the level of risk on ruble deposits has increased, you can switch to bonds (the risks are already comparable, but the yield on the latter is higher).
Receipt speculative income during a crisis, when the market is falling and everything is cheap and, most likely, then it will rise in price.
Separately, I want to remind you that from January 1, 2015 it will be possible to open the so-called individual investment accounts(IIS), according to which it will be possible to issue return of personal income tax. Those. it turns out that the state is ready to pay 13% per annum just for the fact that you will keep money in an investment account. Thus, it does not matter for the investor which financial results he will receive, in any case, subject to all the conditions of the contract, a return of 13% per year is provided.
3. Bonds.
A bond is a security issued either by a company or government bodies(federal, local, regional). Unlike a stock, it has a fixed income - the repurchase value of certain period, or the redemption value. In addition, bonds pay coupon income– interim payments that the issuer pays to the holders of securities. Bonds, like shares, are traded on the stock exchange, and you can also buy them through a broker company. They also have a market value.
For example, the bonds of Russian Standard Bank at the beginning of 2009 cost 33% of their face value. Those. their market price fell sharply due to the banking crisis and high risks for all banks. Nevertheless, the bank resisted and fulfilled all its obligations under the bonds in full, and the owners of these bonds received a yield of 200%.
Difficulty / Activity: Not the easiest, but not the most difficult tool either. The biggest time costs are at the stage of issuer analysis and security selection. Then you can relax and hold until the end.
Yield: Medium. Strong fluctuations are possible only during periods of crisis. Therefore, now it is worth seriously considering this type of investment.
Income Predictability: 100%. You know the bond's purchase price, and the yield before the trade starts. After the transaction, of course, the price of the bond may fall and those who buy after you will earn more. But that's another question. The final profitability is clear immediately.
Risks: Average. The main risk is the risk of default by the issuer.
Other parameters: Liquidity, costs, starting amount - everything is the same as with shares.
Suitable investment objectives:
In stable times, a good alternative to deposits for temporary storage / accumulation of funds for a period of 1-5 years. In this case, the bonds will be used as a conservative asset.
In unstable times, you can get a fairly high and predictable profitability. In this case, the situation turns bonds into assets with an average or high level risk.
4. Structured (or structural) products.
These are the products of banks and brokerage companies that combine elements of risk and predictability at the same time. For example, you invest 300,000 rubles for 1 year and a broker or bank ties your investment to a specific asset. If the value of this asset in a year exceeds the value at the date of the transaction, then you get an increased return on this asset. Otherwise, you get only your amount back or minimum percentage income. Kind of a lottery. Soon we will have a post about how it works and how the bank makes money here…
Difficulty / activity: Not difficult. The product is aimed at the "lazy". The selling party will give detailed advice on the choice of the underlying asset. Activity is also minimal. Invested and forgot, then nothing depends on you ...
Yield: We can say the average.
Income Predictability: Average. Although you will immediately know the minimum yield for 100%.
Liquidity (the rate at which you can get money out of your asset): High. Although there are some products that cannot be exited without losing part of the investment.
Risks: Medium. Since the risk is not reflected in the entire amount of investment, but only in profitability.
starting amount: High. As a rule, from 300,000 rubles.
Additional costs: As a rule, no.
Suitable investment objectives:
A good alternative to deposits and bonds for temporary storage / accumulation of funds for periods of 1-5 years.
Suitable for novice investors who want to take a little risk, but do not want to actively participate in the process.
5. Currency.
Here you can without preface. The whole country is professionals))
Difficulty / activity: Average. Buying bucks, for example, is not difficult at all, doing it on time, and then getting out of them on time - this is difficult. Recently brought great example on .
Yield: Medium. For 10 years from 2004 to 2014, the exchange rate increased from 28.8 to 56.2 rubles. (see chart) or 19.5% per year. However, the growth was mainly during the crises of 2008 and 2014. From 2004 to 2009, or 5 years in a row, the dollar fell. Almost unchanged from 2010 to 2013.
Those. the currency itself as an asset does not have growth potential. Therefore, the presence of currency in the investor's portfolio is designed to solve other goals, namely, protection from currency risks.
Income Predictability: Average. And although the fluctuations here are much smaller in amplitude than in the stock market, it is also difficult to guess the direction of movement.
Liquidity: High.
Risks: Medium. It’s hard to lose all the money here, but up to 10% in calm years and up to 50% during periods of turbulence is easy…
starting amount: Any, even 10 euro cents, lost in your pocket, is also a currency.)))
Additional costs: It's interesting here. Usually people do not pay attention to this, but the difference between the price of buying and selling currency in a bank is very high. Now, when the market is unstable, this difference reaches 20%. On December 16, on Black Tuesday, the difference (or spread) was 100%. This is the cost, because buying a currency from a bank with a difference of 20%, you immediately lose 20%, they still need to win back on growth. There is a way out: to buy currency on the stock exchange directly through a broker. Here the spread is minimal and the commission costs are small, but when working with amounts from 100,000 rubles, the commission is not noticeable. In our article, we examined this issue in more detail.
Suitable investment objectives:
Protection against currency risks. The principle of currency diversification.
In unstable times, the currency becomes an aggressive and investment asset, suitable for short-term earnings on speculation. At the same time, you should also not get carried away and put your eggs in one basket. It is necessary to remember about currency diversification and speculate only with part of the funds.
6. Real estate.
Traditionally, real estate is considered the most attractive investment tool. However, there are many pitfalls. No one will deny that, for example, the ownership of an exclusive commercial area is a very attractive asset from all sides (profitable, reliable, even liquid, etc.). Only here on the total mass of real estate of such unique objects as needles in a haystack. Therefore, consider the characteristics of real estate on average.
Difficulty / activity: High. At the stage of choosing a property, there are a lot of pitfalls. Often there is a need to involve professionals - lawyers, intermediaries, appraisers, etc. At the stage of profitability management, this is practically a business with all the consequences.
Yield: Medium.
The profitability of real estate consists of 2 components:
Rent. As for residential real estate, we have an average yield of 4-5% per annum in the country. Commercial 7-10%.
An increase in the value of the property itself. The graph shows the dynamics of growth in the value of, for example, residential real estate on average in the Russian Federation for 10 recent years: from 20.8 tr. up to 52.3 tr. (2.5 times over 10 years or 25% of the original cost per year).
Income Predictability: Average. As for rental income, it is clearer here, there are average market rates. The task is to hand over the object at the appropriate rate. As for the growth in the value of the asset, here sharp fluctuations are rare, so you can also lay the average% growth.
Liquidity: Low. If you sell quickly, there will be a high discount, and at the price you want, you can sell for a long time.
Risks: Average. Legal risks. Commercial risks.
Additional costs: High. Both the costs associated with the choice of an object and its design, and the costs of maintaining an object
Suitable investment objectives:
Long-term investment for the purpose of obtaining passive income already now or in the future.
Investment investments for the purpose of subsequent resale and earnings due to price growth.
7. Gold and other precious metals.
Gold, along with currency and real estate, is one of the most popular and attractive investment objects in our country. However, gold, despite its brilliance and beauty, has a number of drawbacks! Let's consider everything in order.
Difficulty / activity: High, at the level of work with shares.
Yield: High. Over the past 10 years, the value of gold in dollars has changed 2.9 times (see chart). At the same time, in rubles, it increased from 171 rubles. up to 2168 rubles. - 12.6 times. (+126% to the original cost every year). However, as can be seen from the chart, in the last 2 years there has been a trend towards a decrease in the cost of gold in dollars.
Income Predictability: It's the same with stocks.
Liquidity (the rate at which you can get money out of your asset): If we are talking about metal accounts - high. As for ingots, it's more complicated. The quality of the metal is also evaluated there and is not accepted everywhere. Therefore, let's write liquidity as average.
Risks: High. In addition, metal accounts are not included in the deposit insurance system. Therefore, in addition to the risk associated with fluctuations in the value of gold, there is an institutional risk associated with an intermediary bank.
starting amount: If we are talking about metal accounts, then how with deposits from 1000 rubles.
Additional costs: High. Firstly, for precious metals, when opening metal accounts, there are traditionally very high spreads (the difference between buying and selling), about 20% at present. Secondly, when buying metal bullion, you must pay VAT (value added tax) - 18%
Suitable investment objectives (for beginner investors):
Protecting funds from shock shocks in the economy.
An excellent asset for portfolio diversification, as it has a different dynamics from the exchange rate national currency and the stock market.
Investor's chessboard.
So, to summarize: we have considered 7 basic investment assets. As a result, we get such an investor's chessboard. It will help answer questions about how it is profitable to invest money, and which assets are better or worse in terms of certain characteristics.
In addition to the investment instruments indicated in the table, there are, of course, futures, mutual funds, ETFs, hedge funds, endowment insurance and other scary words. There are tens of thousands of financial instruments and they constantly invent something new. But we have covered all the basic things. All the rest can be attributed with a slight stretch to one or another segment.
In the article we tell how to use the investor's chessboard in practice.
If the article was useful to you, like and share it with your friends!
Good luck with your investment!
In order to start earning on binary options, you need to decide on the choice of the asset on which the forecast will be made. However, many do not know which asset to start trading with and how to choose the most profitable and correct asset.
Financial instruments are primary or otherwise basic ( stock, bonds, raw materials, etc.) and secondary or derivatives (futures, options). In the first case, trading (with or without delivery) is carried out directly by the instrument, and in the second, by an obligation for future delivery (futures) or the ability to make a forecast for an increase or decrease (binary option).
What is an asset for binary options
The underlying assets of a binary option are those instruments, the value of which will be predicted. These can be various indices, securities, goods and others. If taken as a whole, then all of them can be divided into four large categories:
- securities ( shares of companies like Apple, Boeing, Microsoft);
- goods and raw materials ( gold, wheat, oil);
- currency pairs (EUR/USD, USD/JPY, GBP/USD);
- various indexes ( S&P 500, Dow, MICEX, dollar index, etc.).
The concept of " the best, profitable and profitable The value of an asset is very subjective and depends on the trader, his knowledge, previous experience, the depth of market monitoring, and his temperament. To build a correct forecast and at the time of expiration to be profitable, not at a loss, you need to know well what factors influence the formation of the price of the selected instrument.
- For currencies, these are, first of all, statements and decisions of the leaders of the Central Bank, monetary policy, the economic state of the country, the geopolitical and geoclimatic situation.
- Corporate stocks are affected by news related to the activities of the company: its purchase, sale, merger, demand for products, investments, general position in the industry, etc.
- Exchange indices are formed on the basis of a group of several companies united on a certain basis (success, economic sector, industrial, IT, etc.).
- The price of goods and raw materials is determined by their demand - demand, supply, productivity (for crops), explored deposits for raw materials, geopolitics.
How to choose a profitable asset for binary options
When you get on trading platform, you see more than a hundred assets, including the most famous stocks, more than 25 currency pairs, a dozen indices and commodities. How to decide on an asset, with transactions? What to analyze with such diversity?
Push off from your inner self.
If you are closer and like it, or if you are interested in it, even if you don’t know anything about stocks, but you are pleased to think about it and just like it, then this is your most profitable asset at the moment!
Many, out of ignorance and simply confusion, begin to scatter deals, opening deals in a week with stocks, currencies, goods ... that is, in all markets at once - this is a big mistake.
Those who have websites are probably familiar with such a concept as SEO(website promotion), and there are many branches in this business, for example, in the SEO studio there is a person who advertises the site only on facebook and someone only classmates, that is, each of them promotes the site only in one social network, and not immediately in all. You also need to approach and in the analysis of the market. You need to choose only one market and work with it deeply and thoroughly.
For beginners, the easiest option would be commodity market assets − oil, gold, silver (you have to choose one of them). For each asset, there are clear data for analytics, analytical sites and forecasts that come out in the scheduled period, for example, for oil, you can easily follow important data in, where each event plays a big role for the market.
In general, oil is a fairly predictable asset, for which it is easy to collect a base for analytical material, for example, specialized sites with sources of information and news of this market.
If the underlying asset is promotion, then you need to analyze its schedule and get acquainted with reports, statistics and news on the company to which it belongs.
If options are chosen for currency pairs, then it is desirable to get acquainted with the fundamental and technical data on them. For the most common pairs, like or most information, but this does not mean that on USD/CHF harder to earn, it all depends on you - whether you like to look for something that few people can find.
Everyone decides for himself how to choose an asset, but there are a number of objective reasons with which tools it is undesirable to contact. Since we are talking about a forecast, if possible, you should not mess with the unpredictable, fewpredictable and highly volatile underlying assets, because even with high-quality analytical work, there is no certainty where exactly the price will be at the time of expiration - higher or lower.
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Just like taking the brush of a famous artist, you cannot immediately start drawing well like him, and choosing a profitable asset of a successful trader, you will not necessarily succeed on it yourself. You need to find your own way by trial and error.
It would be a good idea to try different markets, but not immediately, but in turn, and based on the results of such testing, select the best and most profitable asset or several of the most promising assets from them, and then, depending on the current situation, turn to one or the other.
- In itself, the question of whether to work with only one underlying asset or with several at once is rhetorical and the debate on this topic has not stopped until now.
What is your favorite asset?
