Investment is an inherent part of everyone’s life; every earning individual is invested in investing money for their future. Micro- investing is one such way of saving up for the dusk years of one’s life reinforces Ali Ata.
Micro investment is ideal for those who do not want to invest a big capital but at the same time want to generate some income apart from their regular means of earning. To define it in the simplest terms, this is a platform for investment in which the investor can opt to buy a part of a share and not the entire share if they do not have enough capital.
Micro investment, as says expert Ali Ata, is characterized by beneficial prospects for its investors. They include:
- provision of user-friendly interface
- fractional ownership
- investment in small amounts
- low transaction costs
- incremental investing
- an informative ground for learning about investing
- control and flexibility in investment habits
Because this is such an advantageous means of passive income, experts in the field propose an investment in this form to all potential investors. The most beneficial aspect of this type of investing is how it facilitates the diversification of one’s portfolio. Those who are habitual in investing know that the one thumb rule of investing is to never invest just in one place. One must ensure that they are putting in their money in various places so that it hedges one against the constant fluctuations of the market. Micro investing, thus, helps one leverage such diversification.
Ali Ata, a veteran in the field of investments points out how micro-investing can be easily done to reap maximum harvests. Some of the ways are mentioned below:
- Research – it is always pertinent that you understand where money is being invested and what it will give you in return. This is why you need to research and find out the options that are available in micro-investment. Look for ETF funds and those that provide a wide range of asset classes.
- Comprehend the asset classes – understanding the different asset classes such as bonds, shares, and real estate investments can help one invest appropriately. One should strive to understand the unique characteristics of each type and also the risks that they entail alongside the profits that can be gained.
- Allocate funds across all types of asset classes – once the assets are properly understood, the idiom of ‘do not put all your eggs in the same basket’ should be religiously followed. Therefore, invest small amounts in different asset classes.
- Concentrate on risk management – irrespective of the asset one invests in, some form of risk is always attached to them. One needs to focus on how those risks will be managed so that there is minimum effect on the outcome. Consider stop-loss orders or trailing stop orders as risk management tools for better results.
Apart from these one should not shift their focus from reviewing and adjusting the investments regularly. This will not just help in identifying and mitigating the risks but also get the maximum profits from the investments.