Wednesday, February 6, 2019

Investments in the USA and their types. Part 1

Investments are becoming increasingly popular among our compatriots. They are an excellent alternative to bank deposits because they allow you to get much more income. If we talk about foreign investment, then American securities are very popular. The US government offers various investment products, among which an important place is occupied by the EB-5 program. This program began to operate since 1990 and involves the provision of substantial benefits to investors who have decided to invest their own funds in the US economy. 

Although the United States is a fairly closed state when granting a residence permit, it still tries to attract investors from other countries who want to place their own funds in a company that operates in one of their regions. Of course, investing carries certain risks, however, the reward in the case of proper placement of funds will be appropriate.

When choosing a type of investment, the following parameters should be considered:

  • the possibility of obtaining a regular income;
  • safety of invested funds;
  • liquidity - the ability to quickly sell investments;
  • increase the value of invested funds;
  • reduction of taxable income from investing.

Features of some investments in the USA

One type of investment in precious metals, mainly gold. Investing in gold and the companies that mine it is considered “defensive”. The value of such assets increases with inflation when the cost of other investments decreases. Inflation has a negative impact on stock prices, but gold in such situations is increasing. Of course, there is no guarantee that the invested funds may not remain, this also applies to regular income, however, depending on macroeconomic factors, a significant increase in value is possible. Often in investment portfolios for the purchase of gold is allocated about 5-15% of all funds.

Certainly popular are real estate investments in the USA. Such investments are considered profitable and reliable. However, in practice, this is not always the case. Such investments are of two types - the house can be purchased in order to subsequently lease it or reside in it. Such an investment cannot guarantee 100% that you will receive a regular income. The increase in the cost of investment depends on demographic and macroeconomic indicators, the annual yield rarely exceeds 4%. Investing in real estate cannot be called liquid because its sale can take a year or a few years.

Investing in US bonds is very popular. Thus, the purchase of treasury securities is considered one of the safest transactions. In this case, the owner receives a regular income, in addition, the bonds have 100 percent liquidity, and preferential taxation is also possible. Among the weaknesses - a limited increase in the cost, as a rule, small.

Buying stocks is another type of investment in the United States. They do not guarantee the return of the money spent if companies pay dividends, then a regular income is possible when acquiring their securities. The liquidity of the shares is large enough, approaching 100%, but this does not apply to new companies. The increase in stock prices is not taxable.

We looked at the most common types of investment in the United States. Having considered the features of each, you can make your choice and make your own portfolio of investments.