If you’ve ever wondered how to start investing, you’re in the right place.
What seems like a complex concept is simpler than you imagine. Investing is, simply, the way you put your money to work so that it grows over time, allowing you to be part of your own financial success.
The first step to investing confidently is laying the foundation for your strategy. Here we guide you through the key concepts.
Your starting point: saving or investing?
The first step is crucial: understanding the difference between saving and investing.
- Saving: Setting aside money for short-term goals or creating an emergency fund. The objective is security and immediate availability.
- Investing: Putting your money to work so that it grows over time. The objective is the long-term growth of your capital, assuming measured risk.
Your strategy should consider both, but if you want your money to truly grow, it’s time to invest.
Know your compass: define your investor profile
Before choosing any asset, you need to know yourself. Your investor profile is the map that guides your decisions and is defined by two key factors:
| Key Question | Purpose | |
| Time horizon | When do you need this money? (Short or long term?) | Determines the time your capital will remain invested. |
| Risk tolerance | How comfortable are you with price fluctuations? | Defines the type of assets that suit your portfolio. |
The combination of these factors will place you in one of these three profiles:
- Conservative: You prioritize security and stability. You seek to protect your capital over achieving large returns. You tend to think of short- or medium-term investments.
- Moderate: You seek a balance between risk and return. You are willing to tolerate moderate fluctuations to achieve better growth in your investments.
- Audacious: You prioritize growth and long-term return. You tolerate high volatility and understand that risk is part of the game.
Understand the golden rule: risk and return
Financial risk and returns are related by a simple rule: the greater the risk, the greater the potential for return or loss.
Seeing your returns change in the short term does not mean you have made poor decisions. It is simply the nature of the asset.
Your safety shield: diversification
Diversifying means distributing your investments across different assets to build a solid portfolio.
Why is it your shield? Because when the return of one asset goes down, the return of another can go up. By distributing your capital, you reduce the impact that a single volatile asset can have on your entire portfolio.
A simple diversification strategy could be to divide your portfolio and have:
- A fixed percentage: This would be the part of your capital dedicated to stable, low-risk products.
- A variable percentage: This would be the part dedicated to assets with greater long-term growth potential.
Take control! Build your strategy with Bitso
The path of investment is a marathon, not a sprint. To start defining your strategy you can:
- Define your profile: Are you conservative, moderate, or audacious?
- Establish your base: Define the part of your capital that will go into stable options.
- Diversify: Don’t put all your eggs in one basket.
- Maintain focus: Create your long-term strategy and don’t panic over daily fluctuations—trust your planning.
You have the knowledge and the tools to start taking control. Open or download your Bitso app today, explore your investment options, and put your strategy to work.
