When it comes to investing, it’s all about making money. Or, more specifically, getting the return that you want, over the time period that suits you best. However, according to Gallup, just 52% of US investors owned stocks in 2016, the second lowest on record.
One key reason for that low drop in the proportion? The growing number of options and ways to invest.
Two options that spring to mind right now – a time amid so much uncertainty over US economic growth, the global war on terror and Brexit – are Start-ups and Infrastructure.
Do Start-Ups Produce Good Returns?
Start-up investment opportunities are always around. Times and trends change and some sectors are more prevalent than others. But, there’s always a wide selection of – potentially successful – brand new businesses, that need funds to begin or take the second or third step in their growth plan.
But, while there are always plenty of start-ups looking for investment, many of them come with a significant risk. Even if experienced people are involved in a sector they know well. After all, just because someone’s proven they can succeed in the past, it’s no guarantee they will do so again.
But, while there is often more risk involved, the opportunity to earn a bigger return, albeit over a less certain period of time, is also there.
If you do choose to invest in a start-up, plenty of research and due diligence is a given. And, financial investment expert Jason Sugarman also recommends investing in an industry you know very well. A decision that can help lower the investment risk – from your perspective at least.
What Makes Infrastructure a Good Investment Option?
Investing in infrastructure, meanwhile, is quite different from a start-up. In the first instance, infrastructure is a much more established investment option. Think:
- Railways.
- Doctor’s surgeries.
- Road networks.
- Some residential managed housing.
In some cases, the returns can be surprising. However, in most situations, the returns aren’t particularly spectacular, but often beat out the stock markets in a tough year. In addition to that, it’s pretty much a guaranteed return over a set period of time.
With that in mind, it’s fair to say infrastructure carries less risk as an investment option, a guarantee you’ll receive back your investment with a reasonable profit on top.
Only Invest in What You Understand
No matter how wealthy someone is, no-one has money to lose. That’s why your investment decision should be personal to you, your experience and situation.
In some cases, both start-ups and infrastructure could work for one individual, but not always.
Focus on your goals, your experience and your appetite for risk, then take the decision based on that information, combined with the option you’re considering. That’s a sensible way to invest in the right way, for you.