The battle between who is young and who is not has long existed.
Many people believe you can be old in age, appearance, or experience but always young. Well, that is true, but when it comes to investing, a young person/individual has enough time to undertake long-term investments and can take risks.
Like everyone else, a young person must do thorough research before undertaking any investment. They must assess their risk appetite and finally know that diversification is a critical principle for being a great investor. Drawing on the assumption that young people have a longer period for their investments, below are some investment options that young people can consider.
- Stocks: Having stocks means you own part of a company that has been publicly listed on the stock market. Stocks are long-term investments every young person with a big risk appetite can venture into. The stock market is volatile, however, over time, the market does well with carefully selected and monitored stocks. A young person has the benefit of time and can afford to wait for the market to correct itself and perform better.
- Real Estate: Young people can invest in real estate. This is because it has a long-term benefit. Examples of real estate investments are REITs, which is a pooled fund that invests in properties on behalf of its members; direct purchase of apartments or houses or warehouses or building these with the intent to rent them for money; purchase of land to resell later at a higher price due to the appreciation of its value. The trick with this, however, is that, because of its high initial capital demand, it is advisable to do it in groups or partnerships.
- Starting a Business: starting a business is not an easy task. However, it is a great venture if one has undertaken proper research, and the business will meet a need. Young people should always note that you should only start a business if it is meeting a need. Apart from the passion one may have to start a business, it is not enough if it does not meet a need. If it meets a need, it will fetch some income.
- Mutual Funds: A mutual fund is a group of people coming together with their funds to invest in different investment portfolios; in so doing, they share the interest and losses. If you have had a group coming together to do ‘susu’ and take the money after a particular time, know that you were involved in a concept similar to the mutual fund investment. The only difference here is that this is regulated and managed by experienced fund managers who would make informed investment decisions on your behalf. The recommendation for a young person is to invest in a mutual fund that invests in shares or commodities or any other long-term investments.
Every young person, whether young at heart, age, or experience, needs to start investing, and the time is now. Remember that the best time to plant a tree was 20 years ago, and the second-best time is now. When in doubt, engage a licensed investment professional to advise and assess which options may best suit your needs and risk appetite.
By Patricia Afun
The writer is an Investment Analyst with Stanbic Investment Management Services with a decade of experience in client relationship roles. With an MBA in human resource management, Patricia is passionate about human resource empowerment and creating wealth through savings and financial discipline. She believes that investing is one of the best ways of creating wealth.
Email: AfunP@stanbic.com.gh
