There are several definitions for best investments, and more precisely, the investment decisions should be based on investors individual circumstances.
There are many theories as to what is the most beneficial investment for a certain type of investor.
Most of these theories base their findings on the scale from risk avert to risk seeking investor.
Some things that (should) according to the theories reflect your investment decisions include age, initial investment capital, debt level, and commitments, such as family.
Types of Best Investments
Anybody can make a analysis of their own investment goals and their aversion to risk and make investment decisions based on that assessment.
However, more commonly, especially if someone is unfamiliar with the risk inherent in investment opportunities, one should consult an investment advisor.
And no, consulting uncle Bob is normally not enough, despite how good stock tips he may have had in the past.
Once you get an assessment from an outside advisor of your investment environment, you should be able to make more informed investment decisions.
The most common risk measurement for an investment opportunity is the variance of the estimated profit from the investment.
Typically, the more variance, the more risk inherent in the investment.
Because the world of financial instruments is so large, you can easily change the risk profile of different types of investments with other investment instruments, such as derivatives.
An advisor will be able to tell you how to maximise the benefits from these instruments in your financial planning.
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