Money & Investing - Banks.com

One of the cardinal “rules” of investing — and becoming a better investor — is to keep investing. No matter what you are investing in,  you should invest in something. Even if your main goal is merely to beat inflation. There are a couple of things you can invest in, other than stocks, that can offer you returns if you are concerned about stocks. (I, however, maintain that now is a great time to look for bargain stocks that are fundamentally strong. Other investments can add diversity, though.) One is relatively safe and the other is quite risky: bonds and currencies.

Investing in bonds

Bonds represent debt. This can be government debt or corporate debt. Right now, many people are skittish about corporate debt — and for good reason. If you get into corporate bonds, many people cynically observe that you should buy bonds from companies that are likely to get bailouts.

Government debt, though, is considered “safer” (although all investment carries risk). This is why Treasuries are so popular right now. But you should be aware that U.S. federal bonds may not offer the best return. Municipal bonds are starting to get another look as well. These are local government bonds that — while not considered as “safe” as federal debt — are thought of as reasonably sound.

Investing in currencies

Currency trading is another form of investment. Well, actually it’s speculation. The terminology is couched in trading terms, but really you are speculating as to which currencies will rise against others. One of the benefits currency trading has (and why it’s becoming so popular) is due to the fact that someone always makes money.  If you think that the current debasement of the dollar means good news for the euro, you can favor the euro and short the dollar. You can also favor the dollar against the sterling at the same time if you feel that the British economy is so far in the tank that the pound will have a hard time recovering.

Be warned, though: Currency trading is extremely risky. You can get higher returns, but the risks mean that you can sustain heavier losses.

The important thing, though, is to broaden your investing horizons. So many people think only of stocks when they think of investing. There’s a whole wide world of investing opportunity out there.

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.