Definition
First of all, you need to understand what “investment” is. Investment is the investment of certain funds into something in order to obtain a specific result. Moreover, the result can be not only making a profit in monetary terms. As an example, by paying for our children’s education, we are making an investment in their prosperous future. The state builds a school or kindergarten - this is a social investment. But still, for a private investor, the result will be the preservation and increase of their savings.
Calculation of profit from investments
Friends, this article is written based on my personal experience and does not constitute investment advice. Before starting this activity, be sure to complete step-by-step training (lessons) on investing from scratch.
Evgenia Artamonova – author of the article
Choose a strategy and risk level
“Think, are you willing to take risks but receive potentially greater returns? If you are afraid of losing capital, it is recommended to purchase low-risk assets. Decide what you will invest in. Stick to a specific strategy,” notes Churilova.
The strategy can be conservative or aggressive. The conservative one is that you form a portfolio of bonds and bond funds. Aggressive implies that you make frequent trades and the portfolio consists primarily of stocks.
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Myths about investing
There are many “scary myths” about investing. In Russia, for some reason, it is believed that investing is very difficult (special knowledge and skills are required), there must be a lot of capital (investing is only for the rich), there is a high risk of losing all your money, and that’s not all the horror stories about investments. I would like to note that in our country, according to many news agencies, less than 5% of the population invests their savings in one way or another. In the United States, more than 96% of the population invests. But let's talk more about investment myths:
- Special skills and knowledge are required. It is not necessary to have special knowledge, but it is necessary to be a financially literate person. When working with a broker, they will be able to advise and explain a lot to you. You can also find various instructions on the Internet.
- There must be a lot of capital. Yes, there must be initial capital, but it can be small. To enter the stock market, 5–10 thousand rubles will be enough. As an example, many mutual funds cost from 1.5 to 15 thousand rubles. And most brokers do not have a “minimum threshold” for starting trading. I would like to note that with moderate risks, income rarely amounts to more than 7–10% per annum. So consider that if you invest 200 thousand rubles, then with a 7% profit you will receive 14 thousand rubles, in addition to your capital. But this is already something. With inflation of 3.7%, you received a profit of 7%, which means you not only preserved your savings, but were also able to increase them.
- There is a high risk of losing all your money. Yes, of course, there is risk, and you need to choose an investment instrument thoughtfully and carefully. As an example, a bank deposit is also a profitable investment. The risk of losing funds is minimal (in Russia, all cash deposits up to 1.4 million rubles inclusive are insured by the state). But the income on deposits is low, so we are not talking about increasing capital. The deposit will only allow you to save your savings. There are three types of investment strategies according to the degree of risk:
– conservative investments. As a rule, they are made for a long period of time, the risk of loss is minimal, and the income is low;
– moderate investment. Golden mean. The term is somewhat shorter than that of the conservative ones, but the income is also slightly higher. The risk of losing money increases;
– aggressive investments. The investor, as a rule, receives a high income, but the degree of risk, loss of all funds, is very high.
Complete at least basic training
Regardless of whether you invest personally or through intermediaries, everyone should have basic knowledge of the economy and how the financial market works. Study the main stock market instruments in detail. Moreover, any information received must be considered and weighed before investing.
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How much can you start investing with?
Many novice investors are wondering what the minimum amount needs to be invested in order to get a good income or earn money on dividends even for a beginner. There is no clear answer to this question. You just need to remember that any investment in 2-3 days will not bring great profits. If someone promised you 200–300% per annum, they are definitely scammers.
there are a lot of scammers around
Let's look at long-term investments with a minimum investment of 2 thousand rubles. and 20 thousand rubles. monthly investment for a period of 20, 30, and 40 years with 10% annual income, which can be obtained without exposing your investments to undue risk:
Isn't it true that the numbers are impressive? The first 3 – 5 years, the increase is insignificant. But don’t forget that this is a progression, and your money will grow, more and more every year. The most difficult thing is not to change your chosen strategy and replenish your account monthly.
This is useful. For novice investors, it is best to use the convenient Tinkoff Investments application.
How does an incubator differ from an accelerator?
The main difference between an incubator and an accelerator is their passage time. The accelerator is usually limited to a few months and only accepts teams with an existing product, albeit in its infancy. Even entrepreneurs who are just starting their journey will receive help in the incubator.
An incubator, unlike an accelerator, provides basic services (workplace, Internet, accounting services), but does not have sufficient expertise to help develop a business. The main task of the accelerator is to have sufficient expertise to help a business grow 10 times or more in a few months through experts, methodology, business experience and connections of the management team.
Incubators usually help startups free of charge; you only need to pay for a workplace, but the price is less than a full-fledged office rental. In the accelerator, the company will take a share and help bring the business to a mature state.
In other words, an incubator is primarily about reducing costs, and an accelerator is about a significant increase in companies’ turnover.
IIDF infographics about accelerators and incubators
TOP – 5 tools for beginning investors
Deposits
Deposits are the most common instrument among Russians. True, no self-respecting investor who places funds in a bank deposit will call it an investment. Unfortunately, the bank deposit is very low, and as mentioned above, it does not allow for an increase in savings, but only for saving from inflationary processes.
According to statistics from the Central Bank of the Russian Federation, the average deposit rate for banks from the top ten as of 01/01/2021. is 4.128% per annum, which barely covers the officially declared inflation process. However, according to the Central Bank of the Russian Federation as of 01/01/2021. Residents of the Russian Federation placed more than 32 trillion in bank deposit accounts. rub. A deposit is rightfully considered the safest tool for investing your savings, which you can learn yourself.
Bonds
Bonds are securities that can be issued by the state represented by the Ministry of Finance, regional authorities, or commercial enterprises. By purchasing bonds, you become a creditor of the person who issued this type of financial instrument.
In other words, everyone has probably encountered bank loans. You borrow money from the bank, pay it back gradually and pay a certain percentage for using the funds. It’s the same with bonds, only they take the loan from you. After a certain time, you receive your money with interest. Buying bonds is considered almost as reliable a financial instrument as a deposit, from which you can make good money. Rates are slightly higher than on deposits and average from 6 to 10%.
proper nutrition for investors
I would like to note that bonds are also different. OFZ bonds (federal loan bonds) have a yield of 4 to 6.5%. And the money back is guaranteed by the state. For bonds issued by municipalities and various corporate organizations, rates are usually higher than 5-10%. You will not get your money back unless the issuer of the securities goes bankrupt. The risk of bankruptcy of a municipality or large corporation is higher than the risk of bankruptcy of a state, so the stakes are higher. Although it is very difficult to believe in the bankruptcy of Sberbank or Gazprom.
Typically, the cost of bonds is 1,000 rubles. But the sale takes place at the market price, which may be slightly higher or slightly lower. Here are some examples of bond sales:
- bonds OFZ-26212-PD. Maturity January 2028 Today, the cost of 1 bond is 1,098 rubles, the yield to maturity is 5.72%;
- bonds KHMAO-Yugra-35001. Maturity December 2023 Today, the cost of 1 bond is 1,040.50 rubles, the yield to maturity is 6.59%;
- bonds Gazprom Neft-003P-02R. Maturity December 2029 Today, the cost of 1 bond is 1,052.20 rubles, the yield to maturity is 6.62%.
Stock
A share is a security, by purchasing which you become the owner of part of a business (company, plant, etc.). Accordingly, if you are the legal owner of part of the business, then you can count on part of the profit that this business brings. There are three types of stock investment strategies:
- long-term with dividends. Your income will consist of annual dividends received and the increase in the value of the share itself;
- long-term without dividends. Often, shareholders with a controlling stake (usually 50% + 1 share) decide not to pay dividends on shares, and use the resulting profits to develop the business. In this case, your income will only be an increase in the value of the stock;
- short-term (speculative). Your income is only the increase in the value of the stock. That is, I bought it cheaper, and after some time I sold it at a higher price.
Buying shares is already considered a rather risky investment instrument. You should purchase shares based on market analysis and the growth prospects of a particular company. There is always a risk that the company whose shares you purchased will go bankrupt, or the share price will not grow, your asset will not work and make a profit. But there is no ceiling on growth.
analytics is the heart of investing
The stock may “shoot” and in a couple of years you will become a wealthy person. For example, the share of PJSC Sberbank of Russia as of 01/01/2009. cost 7.8 rubles, and today it costs more than 198 rubles. It turns out that in 12 years, the stock has risen in price by more than 25 times. At the same time, good dividends are paid. So in 2022 Dividends amounted to 9%.
ETFs and mutual funds
ETFs and mutual funds sound scary and unusual. But what is it really? If you do not want or do not have time to independently study stock market news, monitor, analyze companies, and so on, then the ideal option would be to invest in index funds, mutual funds and ETFs.
These are baskets that contain shares of a large number of companies. Such baskets are linked to the RTS index. It turns out that an investor, buying a share of such a basket, becomes the owner of part of the pool included in this basket. For the formation of such a pool, a commission is usually charged to the management company. Typically, the cost of shares of ETFs and mutual funds is small. For example:
– a share of FXRU (an index fund of corporate Russian bonds, which includes Eurobonds of Gazprom, Rosneft, Norilsk Nickel and other largest Russian companies) costs only 970 rubles. The return for 3 years will be 47.33%.
– a share of VTBH (exchange-traded mutual fund from VTB, which includes US corporate bonds) costs 805.33 rubles. The average annual return in US dollars is 5.4%. You can buy in ruble equivalent.
– FXGD share (investment in gold). The cost is 1,004 rubles. The return over 3 years will be 83.49%.
A similar instrument is mutual funds . It differs from mutual funds and ETFs in that it is not tied to an index and is traded on an exchange.
As an example, TOP 5 mutual funds as of 01/01/2021:
Investments in precious metals
Buying precious metals is the most ancient tool for preserving and increasing your capital. It is also a fairly safe way to invest. The price of gold, silver, platinum and so on is slowly but constantly growing. As an exception, 2022. During a crisis, people always strive to protect themselves by having (eternal currency - precious metals) in their hands.
True, according to many experienced investors, making investments for a period of less than 29 years does not make any sense. In calm times, the cost of precious metals. metals growth is not as significant as we would like. Today there are three ways to invest in precious metals:
- purchasing precious bullion . You can buy an ingot weighing from 1 gram. The cost is not high: 1 gram of gold costs 6.4 thousand rubles, 1 gram of silver can be purchased for 2.6 thousand rubles.
- purchase of investment commemorative coins . Investment coins are issued exclusively for the accumulation of funds and do not have any special “artistic value”. Commemorative coins have an “artistic value” and their price often differs from the face value of 1 gram of the precious metal.
- You can open an impersonal metal account (OMS) . All purchases of precious metals will be recorded in this account in the form of cash equivalent. Accordingly, as the price of precious metals changes, the amount of funds in your account will change.
Of course, there are also a lot of investment tools, such as crowdfunding platforms (collecting funds on sites with subsequent investment in small businesses), investing in cryptocurrency, opening PAMM accounts (currency trading on the Forex market), investing in Internet projects, and so on. . But they are all quite risky and suitable for experienced investors who have already “eaten the dog” in the investment market.
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Make an action plan in case of force majeure
No one is immune from mistakes. Even the most experienced investors admit them. Having a plan in advance will allow you not to get confused in a difficult situation.
“First of all, you need to decide what to do if the market starts to fall. You can agree with yourself that you will not run to sell out of fear, but, on the contrary, will buy additional securities at low prices in order to average out positions and get higher returns. A well-thought-out action plan will help you calm down and make an informed decision that does not depend on momentary worries,” advises Churilova.
Information sources:
https://tass.ru/ekonomika/12696993
Briefly about the main thing
In conclusion, I would like to note that there are quite a lot of scammers . Beware of them. If you are offered an incredible 100, 200, 1,000 percent per annum, then these are scammers. A good investment portfolio can bring you 10 to 15% profit per year.
Investing is quite an interesting job that brings good income. Don’t “lose your head”; during your first steps, try to comprehensively consider the instrument and the subject of investment, and then it will bring results. You can not only preserve your capital, but also increase it.
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Sowing
When the business model is outlined and the startup begins to receive its first clients, it is time for the seed stage of investment. Investors assume that at this stage the entrepreneur has already achieved certain results and is now looking for ways to confirm that his success is not luck, but the result of a working business plan.
The seed stage is the transition from private investments to investment funds. Startups at this level receive funding from venture capitalists and through venture debt. The average investment at this stage is from $1 million to $30 million.
While business angels usually invest their own money, venture capitalists manage the finances of venture funds. They have a different approach. A venture capitalist is a profession, so he has much greater demands on the work of a startup, including participation in operational management and influence on key decisions. The expert invests money and helps the company with his knowledge, leading to successful sales.
Funds and partners almost always specialize not only in large areas, but also in certain areas: they do not invest in technology at all, but only in MedTech or only in GreenTech. For example, the Mindrock venture fund, which was founded by Pavel Cherkashin and Roman Sobachevsky, invests in projects related only to blockchain technology. However, the largest venture funds invest more freely. The famous Sequoia Capital financed many projects that later became billion-dollar corporations: Apple, Google, PayPal, WhatsApp, YouTube, Instagram, LinkedIn and others.
Recently, a new trend has emerged in Silicon Valley: corporate venture capital funds. It's a big entrepreneur's nightmare to miss out on a young startup that will change the game or destroy the industry. This is called the "Kodak effect". Therefore, corporations have their own venture funds, which are constantly looking for and introducing innovations. Their main goal is to find startups that could kill their business and integrate them into their company before the project becomes independent. Projects that already have venture backing can take on venture debt. Essentially, this is a loan that allows you to get money without surrendering capital to the company. True, it will have to be repaid regardless of whether the project is profitable.
