How to make money on stocks in Ukraine?
Today, one of the most popular areas for investment is the acquisition of shares of well-known brands or shares in business projects related to the use of innovative technologies. However, it should be borne in mind that opportunities for investors in Ukraine are very limited due to insufficient infrastructure development. Many novice investors are worried about where to look for promising projects and in which sector of the economy to invest? In our article we will talk about the most popular ways to invest money.
Competent investment in stocks in Ukraine
One of the most reliable areas is the stock market. No matter how fast stock prices change, portfolio diversification will help you stay profitable, but it’s important to understand that it’s a long-term investment. The average income is 8-10 percent per year. For comparison – in a banking institution the profit is 1-2 percent when opening a deposit in dollars.
To get a good income in the future, a potential investor should form a strategy. The advantages of this approach include:
- obtaining a stable passive income;
- small entrance threshold;
- no special education is required because you can work through brokers;
- a competent strategy will reduce risks.
As for the disadvantages, the investor needs to know that with short-term investments, profits will be low. You can invest your money in either foreign companies or the state. In addition, a person can not independently choose those companies that he believes are the most promising. Most brokers do not set a specific entry threshold, so you can start with even small amounts. If you plan to work with a proven and reliable broker, the level of risk will be low.
We recommend investors who are accustomed to working in the least risky way to buy shares of successful companies. To buy this financial instrument on the stock market, you need a developed infrastructure. Unfortunately, it is just emerging in Ukraine.
The Ukrainian stock market is practically not working, but we should not forget about its potential. In the summer of this year, the Cabinet of Ministers signed a memorandum on the development of trade on the stock exchange. This agreement will improve the economic development of the country, as well as help people learn to invest in other instruments. Today, most citizens keep their capital either in a bank or direct money to develop their business. The National Stock Exchange should be formed within three years, ie in the near future the people of Ukraine will not be able to buy shares of popular domestic companies, so it is worth using other methods.
An investor can work in the foreign stock market. To do this, sign a contract with a reliable broker and open an account. From now on, he has the opportunity to buy shares in popular foreign corporations, including Tesla and Microsoft. Brokers do not set a minimum entry threshold and provide loyal cooperation to investors. Any inhabitant of the country can start investment activity.
How to invest in stocks in Ukraine – venture capital
More experienced investors are willing to take risks to make more profits. Another popular tool is venture capital. A person invests his savings in various business projects that have prospects for rapid growth and development.
This type of investment belongs to the category of the highest risks. However, if the startup is really worth it, you will get a big income. For this reason, the portfolio of experienced investors is replenished with shares of venture capital.
The advantages of this method include the ability to make high profits in the case of successful startup development. Disadvantages include high risks, a large amount to enter, a long payback period. On average, an investor should invest about 20 thousand dollars. In this case, you will not have monthly payments, as the amount will be refunded once. To do this, you must either sell your stake or withdraw from the IPO. In the United States, the average income for 10 years is about 14 percent. As for Ukraine, it is impossible to calculate this indicator. It all depends on the success of the project. If you manage to invest in a promising startup, then in the future the income can cover all your investments. It is worth noting that most of these projects are not able to return the money to their investors.
How to become a venture investor?
Unfortunately, venture capital investment in Ukraine is not so simple, because, as noted above, this country does not have a developed infrastructure. For other countries, investors transfer their funds to a fund management fund that diversifies the portfolio. Before buying a stake, Ukrainians need to calculate how much money they are willing to invest in the company.
Former entrepreneurs and startups that have already successfully sold their stake are most often interested in venture capital in the United States. In Ukraine, venture investors are officials, businessmen, top managers of large corporations. However, most of them are poorly oriented in the processes taking place in the market. Without special education it is very difficult to make and weigh your decision.
Invest in stocks in Ukraine – can you reduce the risks?
To reduce the risk of investing in various business projects, it is better for novice investors to immediately create clubs or join existing associations. This approach helps to find the most profitable projects, as well as share experiences with club members. In foreign countries, such institutions are very popular. It is worth noting that many of them are successfully developing and concluding a huge number of agreements per year.
Investment associations can also be found in Ukraine. Many of them interact with venture funds, which have not only the necessary knowledge but also extensive experience in this field. Club members offer startups in which they are ready to participate themselves. If the fund’s project succeeds, 20 percent of the profits will be transferred.
An investor can also direct his money to the management of an investment fund. In such situations, the investment decision will be made by a team of experienced professionals, which will also help minimize risks.
Whichever path you choose, you should not spend more than 25 percent of your investment portfolio on venture capital. It is also worth noting that you need to be prepared for the fact that you may lose your money. If the startup you invested in is the second Tesla, you will get an incredibly huge profit.