Save or Invest?

Understanding Choices for Your Money

What type of Investor are you?

by Ansis Salzirnis  I  November 2021  I  10 min read

Economic Data Puts the EUR and the Dollar in Focus, with the ECB also in Action Today

Three simple tips to decide where your money belongs

Saving and investing are not synonymous, despite the fact that the terms are frequently used interchangeably. Understanding the distinction can help you achieve your financial goals. In the end, a combination of the two may be the best option.

1. Define your goals

When you save, your main goal is to keep your money safe while without losing any of its value. Savings can be useful for an emergency fund, a short-term goal, or any other type of requirement if you need to access the cash immediately.

When you invest, you are giving your assets the opportunity to expand over time. You should be willing to take on more risk with your investing money than you would with your savings. With the possibility to grow your money comes the danger that the value of your account will fall. If you have several years before you need the money for a goal, such as your child's college tuition or your retirement, you may have time to recover from drops in the market.

2. Find the best place to save

When you save, you may want to consider a low-risk place to put your money with convenient access. Depending on your choice, you might earn interest or you might not. Possible options can include keeping the funds in your checking account, savings account, or certificate of deposit (CD).

3. Explore investment options

When you invest, you are purchasing an asset that you anticipate will appreciate in value. Because the value may fluctuate, consider investing money that you won't need in the near future, allowing time and compounding to work in your favor. You may wish to be able to sell when market conditions are favorable, rather than when they are not. Working with a Financial Advisor or becoming a self-directed investor are two ways to get started investing.

Getting started with investing is easy. If you learn about the basic types of investments and find the right advisor, you can begin making more informed financial choices for the future.

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This information is provided solely for educational and illustrative reasons and does not constitute a solicitation or offer to purchase any security or instrument or to engage in any trading strategy. Investing entails risk, including the possibility of losing money. Because each investor's situation is unique, you should consult with your financial advisor to discuss your personal investment objectives, risk tolerance, and liquidity requirements in order to develop a suitable investment strategy.

Tradex Ltd. and its subsidiaries do not offer legal or tax advice. Please consult your legal and/or tax professionals to determine how this information, as well as any anticipated tax consequences, may apply to your circumstances at the time your tax return is filed.

Asset allocation and diversification are financial strategies that can help you manage risk. They do not guarantee investment returns or remove the danger of loss, even in a down market.

Past outcomes are not a guarantee of future results.

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