10 year bond yield. Tightening of monetary policy by the Federal Reserve

20.01.2023

Hello, dear readers of the SlonoDrom.ru magazine! Almost each of us at some point thinks about where to invest money so that it works and brings monthly income.🙂

There are actually a huge number of investment options! Not all of them are effective, and what to hide are often simply fraudulent organizations whose only goal is to get money and hide with it forever. I know this first hand!😀

In this publication, I will try to tell you in detail about the most relevant and proven areas for investing money in 2019! And of course, in practice we will try to objectively figure out where it is more profitable and best to invest your money.

You will also learn about where you should not invest your money so as not to lose it!

And most importantly, I will share with you my life experience , concrete examples And useful tips that will allow you to invest money correctly and get high passive income!👍

Regardless of what amount of money you are going to invest: small or large, this article will be as useful as possible for you!

In addition, you will learn:

What investment options are there, what are their returns and which one should you choose?
Where can you profitably invest money on the Internet?
How to invest money correctly so as not to burn out?
And also about where it is better not to invest your money!

Sit back and let's get started! The article turned out to be a little long, because I tried not to miss anything important. I hope I succeeded!😉

1. What is important to know about investments?

First, what you need to know before investing your money anywhere is that you only need to invest your free cash ! Under no circumstances should you invest money that you desperately need, and especially do not get into debt, loans, or credits.

No one gives an absolute guarantee that you will increase your invested money! There is always a risk of losing money, even if it is a highly guaranteed investment (for example, government bonds or bank deposits).

You should always remember this, because investments can bring both profit and loss!

Secondly, before investing your money anywhere, you need to actually evaluate what exists risks and which one profitability can be obtained from one or another investment.

Usually the risk is proportional to the income, i.e. the higher the profitability, the higher the risks and vice versa. But this rule does not always work.

But in any case, those who do not take risks do not earn money. It is always necessary to take meaningful risks!😉

In order for you to decide for yourself whether or not it is worth investing in one or another investment option, we will analyze each of them based on the following most key parameters:

profitability,
risk,
payback period,
minimum investment amount.

We will also consider all the pros and cons of each investment option.

Third to reduce risks, it would be logical diversify your investments, i.e. distribute the entire investment amount into parts depending on the risk and invest in different assets.

For example, you can distribute it like this:

conservative portfolio (bonds, real estate, precious metals...) - 50% of all funds;
moderate portfolio (mutual funds, shares, business projects...) - 30% of all funds;
aggressive portfolio (foreign exchange market, cryptocurrencies...) - 20% of all funds.

❗️Important:
There is no need to invest all your money only in instruments with very high returns, since in this case the risk of losing your money will also be very high!

On the contrary, many people strive to receive maximum income, but at the same time completely forget about the risk. And as a result, due to greed, they are left with nothing.

Investment is all about risk management! First of all, you need to take care not to lose money. Profit is the second thing.

And if you have little or no experience in investing yet, then start investing with minimal amounts and avoid high-risk assets.

Read this article to the end, because at the end of the article you will learn about other important rules of investing!👇

2. Where is the best place to invest money in 2019 - TOP 15 profitable investment options

So, let's finally look at the options and decide where you can profitably invest your money so that it generates income!

Option #1: Bank deposits/savings accounts

DESCRIPTION: The simplest and most accessible investment option for everyone is regular bank deposits. In Russia, the annual interest rate on them is on average from 6% to 8%.

IN last years deposit rates have been falling steadily and will likely continue to fall in the future.

How to make money on stock growth - Google example

In 3 years, Google shares have grown by more than 100%!

For these purposes, the so-called “individual investment accounts"(IIS), which, for example, can be opened in Finam or BCS (and even in the same Sberbank).

☝️In addition, if you invest money for at least 3 years, you will be able to receive a personal income tax deduction (13%), i.e., in fact, you will not need to pay income taxes! Such preferential terms were developed by the state to support and develop investment in the country.

But of course there are many nuances that need to be taken into account when investing in stocks. There are risks always and everywhere - you shouldn’t forget about them!

The biggest risk for stocks (for those who bet on their growth) is financial crisis! The rest of the time, shares generally grow steadily and show good profitability.

Alternatively, you can invest money in a group of shares, i.e. so-called indices (they show economic situation in the country), for example:

RTS (50 largest companies in Russia),
S&P500 (500 largest US companies),
NASDAQ (100 US high-tech companies).

If you do not want to invest personally, then there is an option to entrust your money to professional managers. But I will describe this in detail below.

CONCLUSION: With proper management, shares can generate good returns, several times higher than the interest rate on bank deposits. But at the same time they are considered riskier assets.

Profitability:	Risk:	Payback:	Minimum investment:
15-100% per annum (change in share price + dividends)	depends on strategy	1-7 years	from 5-10 thousand rubles
(⭐️⭐️⭐️ - medium/high)	(⭐️⭐️ - medium/high)	(⭐️⭐️ - average)	(⭐️⭐️⭐️ - low)
➕ Pros and ➖ Cons:
(+ ) With minimal/moderate risks you can get relatively high returns.	(+ ) High liquidity - at any time you can quickly sell shares and get money in your hands. Low entry threshold.	(- ) Knowledge required. Uncontrolled risk and “flirting” with the market can lead to significant losses.	(- ) In the event of a crisis, shares can seriously and quickly fall in price.

Option #4: Bonds

DESCRIPTION: Where do you think the money is invested? large banks? Mainly in bonds! Yes, they provide a small income, but with a high guarantee and reliability. Especially if you take government bonds.

Along with bank deposits, bonds are considered one of the simplest investment instruments. But unlike bank deposits, the interest rate on bonds is significantly higher.

For those who don’t know, a bond, simply put, is an IOU. Only large companies and states can act as borrowers.

? By the way, Sberbank and VTB24 recently began selling national government bonds.If you invest money for 3 years, you can get an average return of 8.5% per annumX .

I agree, not very much, but the rate is certainly better than most available on this moment bank deposits. Moreover, in the future, deposit rates may decrease.

You can also consider bonds of large, reliable companies - their rates will be higher! For example, on Sberbank bonds the average yield is approximately 9,2%-12,2% per annum (depending on the term).

At the same time, you can invest large amounts of money in bonds, since the security of funds here will be higher than, for example, in bank deposits, where only 1.4 million rubles are insured.

I would also like to note that there are also bonds whose yield can be tens And hundreds of percent . But such bonds have a low credit rating(This is why they are called “junk bonds”). Although they can generate fairly high returns, they are a very risky investment.

Bonds, just like shares, can be purchased through an individual investment account (IIA) without having to pay income tax (if you purchase them for a period of more than 3 years).

CONCLUSION: Bonds are suitable for those who seek to receive an average return with a relatively high guarantee.

Profitability:	Risk:	Payback:	Minimum investment:
from 7% to 15% per annum (for risky ones from 30% to 100% and above)	depends on bonds (for government bonds - very low)	7-12 years	from 10 thousand rubles
(⭐️⭐️ - medium/low)	(⭐️ - low)	(⭐️⭐️ - medium/low)	(⭐️⭐️⭐️ - low)
➕ Pros and ➖ Cons:
(+ ) Optimal profitability combined with low risks. You can sell bonds at any time without losing income.	(+	(- ) Relatively low yield compared to stocks and some other assets.	(- ) There is a risk of bankruptcy of the issuer (especially for bonds with a low rating). The lower the credit rating, the less confidence in it.

Option #5: Forex

DESCRIPTION: Forex is essentially a foreign exchange market where you can buy/sell this or that currency. This can be done both through banks and online with the help of specialized brokers (where, by the way, the commission is 10 times less).

Example!
For example, you purchased 10,000 dollars at the rate of 57 rubles/dollar - as a result, you invested 570,000 rubles in dollars. After a while, the rate reached 60 rubles per 1 dollar, and you sold dollars.

As a result, after the exchange you received 600,000 rubles, and the income accordingly amounted to 30,000 rubles(of which the broker's commission is approximately 600-800 rubles).

You can trade on Forex either yourself or give money to manage professional traders(this will be discussed in detail in the next section of the article).

When trading currencies on your own, it is very important to have trading experience from knowledge of the foreign exchange market . It’s not worth going into the foreign exchange market just like that, in the hope of easy money (and that’s exactly what I did 🙂), as this usually leads to serious losses.

It is important to note that when trading in person, you need to follow proven trading strategy, otherwise trading will most likely turn into a casino and lead to a sad result known in advance.

But on the other hand, if you observe risk (money management), manage emotions and trade exclusively according to strategy, then you can actually make good money on Forex. But this needs to be learned!

Although you can start on Forex with minimal amounts - from $1, you still need more or less serious investments (preferably from 100 thousand rubles), since even if you manage to increase the initial deposit by 10% per month (which is very good), the profit will not be that big.

In my opinion, one of the most effective trading strategies on day bars is Price Action. There are many articles written about her on the Internet - if you are interested, read them!

Among reliable brokers you can choose, for example, Alpari or RoboForex.

CONCLUSION: The Forex market is more unpredictable than the stock market, and therefore riskier. However, with skillful investing you can get high income. For those who are not ready to seriously study, this option is not suitable - it is better to consider PAMM investing. This will be discussed below!👇

Profitability:	Risk:	Payback:	Minimum investment:
from 15% to 100% per annum and above	depends on the strategy (initially has a high risk)	1-7 years	from 100 rubles
(⭐️⭐️⭐️ - high/medium)	(⭐️⭐️⭐️ - high/medium)	(⭐️⭐️⭐️ - high)	(⭐️⭐️⭐️ - very low)
➕ Pros and ➖ Cons:
(+ ) In the presence of effective strategy you can get high returns.	(+ ) Low entry threshold and accessibility.	(- ) High risks, especially for beginners. You can lose significant money in a short time if you do not manage the risk. 99% of beginners lose their money.	(- ) Training required: specialized knowledge and experience, as well as the ability to manage emotions. There is no guarantee that you will make a profit in any given period.

Option No. 6: PAMM accounts, PAMM portfolios, trust management and structured products

DESCRIPTION: But this method is usually suitable for those who do not have the experience or time to understand all the nuances of trading in financial markets (stock markets, Forex, oil, gold...).

That is, in this case, you entrust your money to traders - those who professionally trade in financial markets.

All you need to do is distribute the initial investment amount into parts (preferably at least 5-10) and invest in different managers.

For example, the Alpari broker, which I mentioned above, allows this. The entry threshold here is only $10.

At the same time, traders are interested in increasing your money, since only from the profit they receive a small reward for their work.

⭐️ About profitability!
The income here can be quite acceptable - 3-10% per month with moderate risk! But even with conservative trading, 20-30% per annum is also excellent!

PAMM accounts and PAMM portfolios for investments must be assessed based on at least 3 parameters:

account/portfolio age,
past profitability,
funds invested by other investors.

For example, here is one of the most popular PAMM accounts on Alpari:

PAMM account “Lucky Pound” and its profitability (click to enlarge)

💡 Over $500,000 was invested in this PAMM account (trader), its return for 3 years and 8 months was 2051%.

However, it should be taken into account that although accounts/portfolios have shown good returns in the past, there is a possibility that they will be unprofitable in the future.

Therefore, I repeat, do not invest all your money in one trader! Constantly monitor the situation and get rid of accounts/portfolios that have been generating losses over a long period. This is the whole secret of investment!

Read more about how to properly invest in PAMM accounts (watch training videos) on the website tradelikeapro.ru. I use it myself, there is really a lot of useful information there!

With a larger initial capital, you can work with large stock brokers (for example Finam and BCS), who also provide different strategies trust management.

For example, on Finam in trust management can you give from 300 thousand rubles. Their website presents dozens of diverse strategies: conservative, moderate and aggressive.

Of course, both brokers and managers also cannot 100% guarantee that you will receive income.

I would like to tell you a few words about the so-called “structured products”.

They are also intended for beginners who want to increase their money. Structured products can bring returns up to 100-200% per annum with minimal risks(risk is strictly limited, there is capital protection - usually you risk only 10% of your investment).

The essence of structured products is that you also invest money in stock markets (more precisely in specific stocks, futures...), which experts expect will rise or fall in the future.

It is usually possible to invest in such products from 3000 dollars and for a period from 3 months.

Here is an example of structured products on Alpari:

CONCLUSION: Trust management combines convenience, moderate risks and medium/high returns. Especially suitable for beginners.

Profitability:	Risk:	Payback:	Minimum investment:
from 15% to 200% per annum and above	depends on the type of strategy: conservative, moderate, aggressive	1-8 years	from 500 rubles
(⭐️⭐️⭐️ - high/medium)	(⭐️⭐️ - medium/high)	(⭐️⭐️⭐️ - high)	(⭐️⭐️⭐️ - low)
➕ Pros and ➖ Cons:
(+ ) By distributing funds among the most effective managers/strategies, you can get a good average return. Suitable for beginners.	(+ ) The minimum amount for investment (especially in PAMM accounts) is quite low. There is no need to engage in trading yourself.	(- ) Relatively high risks compared to bonds and bank deposits.	(- ) It is difficult to predict profitability, as there may be unprofitable periods. Managers need to be monitored periodically.

Option No. 7: Own/partner business

DESCRIPTION: And this, in my opinion, is one of the most profitable ways of investing, which can bring you hundreds or even a thousand percent of income!

Of course, in most cases, business requires personal presence. But on the other hand, a business can be automated or simply invested in someone’s business at the development stage.

Another option is to buy ready business or open a franchise business (in this case the risks will be much lower).

Moreover, even if you have a small initial capital, you can still open your own business. Many people have opened a profitable business with little or no investment, so money is not the most important thing here, the main thing is desire and desire!😀

I myself started a successful business from scratch several times! By the way, if you look at the statistics, then among millionaires there are about 70-80% - these are entrepreneurs who started a business from scratch!

✅Please note:
You can turn your hobby into a business and never work again in your life, but do what you love! Perhaps this is the most preferable option!

As Confucius said:
« Choose a job you like, and you will never have to work a single day in your life!«

Read about how to find your favorite job/work of life.

If you don’t yet have a stable source of income, then first of all think about creating a business, even if it’s small at first. The main thing in this matter is not to be afraid take the first step!

Think about it, maybe you've always wanted to open your own auto repair shop, hair salon, sporting goods store or handicraft store?

Here are some more useful tips:

Start small (and with minimal investment) and gradually grow your business. At the initial stage of business development, do not invest a lot of money right away.
Choose niches with minimal competition - they are easier to start in.
If you have a small initial capital, then it may be worth trying a service business.

I will also give you several options from my experience on how you can start a business with minimal investment, I think you will be interested!👇

Examples!
It is not difficult to start your own business on the Internet. For example, you can provide services or sell goods through ad platforms (the most popular is Avito). This is exactly where I started! 🙂

By the way, goods from China are now very popular, where the markup can reach up to 500-3000%. Including such products are successfully sold via the Internet (one-page websites).

Another area that does not require large investments and is not so difficult to start is a wholesale business via the Internet.

Moreover, both in the case of wholesale and retail sales, the goods do not have to be in stock - you can work according to the dropshipping scheme. The main thing is to find clients (you can do this for free on message boards).

In short, the essence of dropshipping is that you work with a supplier who directly ships the product to the client. He sells his goods and earns income from this, and you receive your markup from the sale.

Read more about how to organize in a separate article!

CONCLUSION: A business can generate very high returns with minimal investment. In addition, business can be turned into something you love, something you are interested in and want to do!

Profitability:	Risk:	Payback:	Minimum investment:
from 30% to 1000% per annum and above	At the initial stage there is a high risk	from several months to 1-5 years	from 10,000 rubles (you can even start from scratch)
(⭐️⭐️⭐️ - high/medium)	(⭐️⭐️ - medium/high)	(⭐️⭐️⭐️ - high)	(⭐️⭐️⭐️ - low/medium)
➕ Pros and ➖ Cons:
(+ ) One of the highest returns among all investment instruments.	(+ ) It is easier for a business to find partners and/or co-investors. You can start without large investments, the main thing in business is the idea!	(- ) High initial risks. 7-8 out of 10 start-up businesses close within 2-3 years. Low liquidity - it is difficult to quickly sell a business.	(- ) You need to understand business and understand how it works, even if you invest money in “someone else’s” business. You constantly need to learn.

Option #8: Mutual funds

DESCRIPTION: Mutual funds can also be classified as trust management, which we have already talked a little about.

Mutual funds are professionally engaged investment activities, investing and managing the money of their investors (investing in certain stocks, bonds...).

Absolutely anyone can become an investor; to do this, you need to purchase a share (share) in the share investment fund. Depending on whether the mutual fund successfully manages investments, shareholders receive a profit or loss.

It should be noted that the activities of mutual funds are regulated by state level and, as a rule, they are prohibited from investing in high-risk assets. Therefore, they are considered more secure than the same brokers.

Mutual funds usually give low income(usually 15 to 30% per year), with little risk. Here is an example of the profitability of some mutual funds for 11 months:

Profitability of mutual funds for 11 months

However, mutual funds do not provide a guaranteed profit, unlike bonds and deposits; there are also often unprofitable periods.

But in general, if we take a period of 3-5 years, then many mutual funds show positive dynamics and make a profit (provided there is no crisis). Therefore, it makes sense to invest in mutual funds for a period of 1 year or more.

The minimum investment amount is from 1,000 rubles. You can buy shares online, including through certain banks, for example Sberbank.

If this type of investment is suitable for you, then it makes sense to choose not one mutual fund, but several, in order to distribute possible risks.

And make it a rule that before investing anywhere, including in any specific mutual funds, read the reviews real people on the Internet, and also read what they write about them on forums. With this simple action you will protect yourself from unreliable and fraudulent organizations.

CONCLUSION: Mutual funds can be considered as an alternative to brokers, who also invest money mainly in the stock market. Provided there is no crisis, they usually also bring good profitability.

Profitability:	Risk:	Payback:	Minimum investment:
from 12% to 30% per annum	moderate	3-10 years	from 1,000 rubles
(⭐️⭐️ - average)	(⭐️⭐️ - average)	(⭐️⭐️ - average)	(⭐️⭐️⭐️ - low)
➕ Pros and ➖ Cons:
(+ ) The average yield exceeds interest rates on bonds and deposits.	(+ ) Low entry threshold, as well as state control of the activities of mutual funds.	(- ) There is no guarantee that you will receive income. There is an additional “commission” (surcharge) for the purchase/sale of shares.	(- ) You will have to pay 13% tax on profits - many other investments have preferential tax conditions.

Option No. 9: Microfinance organizations (MFOs)

DESCRIPTION: Another type of investment is investing in microfinance organizations. The return on such investments averages from 12% to 30% per annum.

The minimum amount required to invest in an MFO must be no less than 1.5 million rubles (by law).

How longer term investment, the higher the interest rate. Minimum term in MFOs, as a rule, it is 3 months.

It should be noted that in this case there is no deposit insurance, and in general the risks are much greater than if you invest money in bonds or in a bank at interest.

If you still decide to invest in microfinance organizations, be sure to choose a proven company that has been operating on the market for more than one year.

⭐️ Good advice!
Look first at the “age” of the MFO, and not at the interest rate they promise you.

After all, it is better to invest money in a reliable organization at a slightly lower interest rate than in a newly established MFO with a high interest rate.

Additionally, it would be a good idea to look at reviews and read articles on well-known information portals(for example, RBC) about this or that microfinance organization.

If you want to know my opinion, then in my opinion, if you have investments of 1.5 million rubles or more, then it is more profitable and reliable to invest money in real estate than in microfinance organizations! 😀

And besides, I myself don’t take loans/loans (especially consumer ones) and I don’t recommend them to others!😉

CONCLUSION: MFOs in general provide 1.5-2 times more profitability than bank deposits. But there are also corresponding risks. And the entry threshold, to put it mildly, is rather large.

Profitability:	Risk:	Payback:	Minimum investment:
from 10% to 30% per annum	moderate	3-9 years	from 1 million rubles
(⭐️⭐️ - average)	(⭐️⭐️ - average)	(⭐️⭐️ - medium/low)	(⭐️ - high)
➕ Pros and ➖ Cons:
(+ ) High rate relative to bank deposits.	(+ ) Passive income. Minimum participation from your side.	(- ) Very high entry threshold. According to the law, MFOs are allowed to borrow from individuals from 1.5 million rubles.	(- ) Increased risk, since there is no deposit insurance - in the event of bankruptcy, no one will return the money. There is fraud.

Option #10: Precious metals

DESCRIPTION: Another well-known type of investment is investing in precious metals, in particular gold. Moreover, such investments are highly reliable!

It is especially important to invest money in gold and other precious metals during a crisis, since this is where money migrates from the stock market.

Gold coins/gold bars can be purchased from almost any bank (Sberbank, Gazprombank) or from brokers (for example, Alpari).

Despite its high reliability, investing in gold is more suitable for preserving existing funds than for increasing them. In addition, such investments are designed for a longer term period of 3 years or more.

Gold prices - chart

❗️ Over the past 5 years, gold in rubles has increased from 1,600 rubles per gram to 2,400 rubles per gram.

The total profitability for the five years was 50% (on average gold rose by 10% per year) and such profitability was achieved thanks to serious depreciation of the ruble.

However, if you look at the dynamics of gold against the dollar, you can see that gold has dropped significantly in price since 2012 and is currently in a sideways trend.

CONCLUSION: It still makes sense to buy precious metals (gold) either in times of crisis or in the long term for the purpose of preservation.

Profitability:	Risk:	Payback:	Minimum investment:
from 3% to 15% per annum (in a crisis the yield is higher)	Minimum	7-20 years	from 1000 rubles
(⭐️ - low)	(⭐️ - low)	(⭐️ - low)	(⭐️⭐️⭐️ - low)
➕ Pros and ➖ Cons:
(+ ) High reliability of investments. There is virtually no risk of gold depreciation. Easy to buy/sell at any time.	(+ ) Precious metals (especially gold) are a “safe haven”. Investments in them are suitable for preserving funds during a crisis.	(- ) Low profitability during periods of economic growth and development. Income tax is 13% on the sale of gold if the holding period is less than 3 years.	(- ) Relatively high commissions of banks/brokers when buying/selling precious metals, incl. gold.

Option #11: Cryptocurrencies (Bitcoin)

DESCRIPTION: Bitcoin has grown more than twice in recent years and, apparently, is not going to stop. New millionaires are already appearing who have become rich solely by investing in Bitcoin.

Of course, the best time to invest was a few years ago when Bitcoin was worth around 150-200 dollars.

Some experts say that in the future Bitcoin could be worth hundreds of thousands of dollars and even possibly reach $1 million.

Others argue that Bitcoin is about to collapse. But despite this, some states (including Russia) are thinking about creating their own national cryptocurrency, which suggests that the topic of cryptocurrencies will be very popular in the future, which means that Bitcoin and other cryptocurrencies will probably increase in price.

Moreover, while cryptocurrencies are showing a steady growing trend.

But you need to understand that any cryptocurrency is another bubble, since there is nothing real behind it and yet it is a rather risky investment instrument.

For example, Bitcoin can rise or fall by 10-25% - This is quite a common occurrence here. And in a year you can either increase your investment by 3-10 times or lose almost everything!

CONCLUSION: On the one hand, cryptocurrencies are too risky an instrument, but on the other hand, if they grow, they can bring huge returns. Whether it is worth investing in it or not, everyone decides for themselves, one thing is clear - it is definitely not worth investing all your money in them!

Profitability:	Risk:	Payback:	Minimum investment:
from 20% to 1,000% per annum	elevated	from 3 months to 1-5 years	from 100 rubles
(⭐️⭐️⭐️ - very high)	(⭐️⭐️⭐️ - very tall)	(⭐️⭐️⭐️ - very high)	(⭐️⭐️⭐️ - very low)
➕ Pros and ➖ Cons:
(+ ) If cryptocurrencies grow, you can multiply your invested funds in a short period of time.	(+ ) As a rule, there is no inflation due to the limited amount of issued cryptocurrency.	(- ) Very high volatility of cryptocurrencies; in a matter of days they can both rise in price and seriously collapse. Low predictability.	(- ) Cryptocurrencies are not backed by anything, as this is another bubble. There is a complete lack of guarantees - if you lose money, no one will return it.

Option No. 12: Internet projects (online business)

DESCRIPTION: The Internet is developing at a tremendous pace, at the same time providing each of us with the opportunity to earn money on this global network.

It is important to note that large investments are not always required to promote a particular project on the Internet. Some of the projects can be started with minimal investment or even from scratch.

The following directions are currently popular:

1. Websites. Information websites are created and filled with unique content.

With minimal investment it is possible to obtain high returns through advertising. Typically, the site begins to generate its first income in 4-6 months.

WITH 1000 visitors per day, depending on the topic, you can earn approximately 200-3000 rubles in a day. The spread is very large, since the topic of the site determines how much income you will receive.

Making money on websites is suitable even for beginners, since you can write articles yourself, rather than order them from copywriting exchanges.

But still, at the beginning you will need to get to the bottom of it and understand the key details of such a business.

2. Social publics. Surely almost each of us is subscribed to some community on social networks (VKontakte, Facebook, Odnoklassniki...).

Meanwhile, the owners of such public sites also earn money mainly from publishing advertising posts. In public pages with millions of subscribers, the cost of one advertising post can be 2-7 thousand rubles .

Public sites pay for themselves very quickly with relatively small investments. Although the competition in public pages is high now, if you choose the right topic for the public, post high-quality and interesting content and develop the public, you won’t have to wait long for success!

3. CPA affiliate programs/traffic arbitrage. Their essence is that some business owners are willing to pay a certain percentage of the sale of their goods/services.

For example, if a person follows your affiliate link and opens a current account in a specific bank, then you can earn 2-3 thousand rubles.

If you know how to effectively attract traffic through advertising, then it is quite possible to get a high return on investment. However, as you probably already understood, the main investments here go specifically to advertising.

But in this case, experience plays the main role, without it you can’t go anywhere!

4. Online services. You can also invest money in creating an online service. These include various freelance exchanges, message boards, exchangers...

For example, projects that exchange electronic money(essentially they are called exchangers).

For example, if you need to transfer money from a Yandex wallet to a Qiwi wallet, then the easiest way to do this is with the help of exchangers. By the way, you can also purchase bitcoins using exchangers.

Exchangers, in turn, charge a small commission for the exchange (usually 1-5% ). Due to turnover, a fairly decent income is obtained.

5. Applications for iOS/Android. Since relatively recently, applications for Android and iOS have become very popular - this is a large segment of the market where a lot of money is circulating.

Therefore, if you have an interesting idea that will be in wide demand, then it might be worth trying to create your own application.

❗️ For example, applications for selling airline tickets are quite popular; here you can receive quite decent affiliate commissions from airlines.

Even if you don't know anything about how to create applications, you can create them for very little money ( 20-30 thousand rubles ) order on freelance exchanges.

Here, as elsewhere, the key role is played by the idea - the success or failure of the application depends on it.

6. Hype. HYIPs are in reality a financial pyramid that lives off the funds invested in it.

Such HYIPs offer very high interest rates ( 1-5% per day) on the invested funds, but of course they can function for only a few days or weeks after which they disappear without a trace.

There are HYIPs that “live” for several months or even several years, but the profitability on them is correspondingly several times/tens of times lower.

In any case, invest in such hype Very risky , because mainly the creators of these HYIPs and a small group of investors earn money - who managed to withdraw money with a profit before the HYIP turned into a “scam” (stopped paying out money).

And yet, I strongly advise you not to invest in HYIPs, especially if you don’t particularly understand this.

CONCLUSION: Online projects are a great option for those who want to make money on the Internet. With the right approach, Internet projects can provide high returns with a minimum investment.

Profitability:	Risk:	Payback:	Minimum investment:
from 30% to 500% per annum	moderate	from 3 months to 2-4 years	from 500 rubles
(⭐️⭐️⭐️ - high)	(⭐️⭐️ - medium/high)	(⭐️⭐️⭐️ - high)	(⭐️⭐️⭐️ - very low)
➕ Pros and ➖ Cons:
(+ ) High profitability. The investment can pay off very quickly.	(+ ) Some projects can be started with minimal investment or even from scratch, investing only your time and effort.	(- ) There is a risk that the project will not take off and will not pay for itself.	(- ) Knowledge will be required. You need to have a good understanding of the key nuances of online business.

Option #13: Venture funds/investments

DESCRIPTION: Venture funds are especially widely developed abroad; in our country they are not yet so popular, but nevertheless they are a fairly profitable investment instrument.

The essence of venture funds is that they invest money exclusively in projects that are at the development stage (startup) or even at the idea stage.

A distinctive feature of venture investments is their very, very high returns, they can bring in thousands of percent!

But on the other hand, only 1-2 out of 10 projects succeed and bring huge profits. But despite this, they usually more than recoup all investments in “failed” projects.

☝️ Real example!
Today's largest companies Apple, Google, Intel... and even the well-known Chinese online store Aliexpress (Alibaba) started with venture investments.

Over 2 years, Apple shares have grown by approximately 5000 times! So if you invested at the start-up stage of your business, 100,000 rubles, after 2 years your fortune would already be 500 million rubles .

There are basically several ways to invest money in startup projects:

crowdinvesting and crowdlending platforms (suitable for beginners);
venture funds;
investor clubs.

CONCLUSION: But still venture investments poorly developed in Russia. Yes, and often a large one is required start-up capital, and among crowdinvesting platforms (where the entry threshold is not high) there are often scammers. Meanwhile, venture investments can bring very high returns!

Profitability:	Risk:	Payback:	Minimum investment:
from 40% to 3000% per annum	elevated	from several months to 1-3 years	from 10,000 - 100,000 rubles (to venture funds - from $500,000)
(⭐️⭐️⭐️ - very high)	(⭐️⭐️⭐️ - very tall)	(⭐️⭐️⭐️ - high)	(⭐️⭐️ - high/medium)
➕ Pros and ➖ Cons:
(+ ) If successful, you can get the highest possible return.	(+ ) It is not always necessary to invest large amounts of money at the start of a project.	(- ) Very high risks, most starting projects turn out to be unprofitable.	(- ) Fraud is widespread - investment platforms can turn out to be financial pyramids.

Option #14: Art objects

DESCRIPTION: Another unusual way to invest your money is in art. This is a fairly narrow and specialized market, however, it can bring good profitability.

It's no secret that certain works of art can cost hundreds and even millions of dollars. And if you really understand art, then you can earn hundreds of percent profit on investments.

❗️ Only important feature at the same time, such investments often require large investments . And besides, to get a good return you need to invest for a long period ( decades ).

Like investing in precious metals, investing in art is not subject to inflation and will only become worth more over time.

And the crisis has virtually no effect on the value of art objects.

CONCLUSION: This type of investment is suitable for those who understand at least something about art and are ready to invest money for the long term.

Profitability:	Risk:	Payback:	Minimum investment:
from 20% to 100% per annum and above	minimum	usually from 1 to 3-5 years	from 100,000 rubles and above
(⭐️⭐️ - medium/high)	(⭐️ - low)	(⭐️⭐️ - average)	(⭐️⭐️ - high/medium)
➕ Pros and ➖ Cons:
(+ ) You can get relatively high returns with minimal risks.	(+ ) High reliability. Over time, art objects only increase in price.	(- ) Often, investing in art requires a large initial capital and involves long-term investment.	(- ) You need to be a specialist, have specific knowledge and experience.

Option No. 15: Knowledge and personal development

DESCRIPTION: No matter how incredible it may seem, it is always the most profitable investment is always an investment in yourself (in the development of specific skills, abilities, knowledge, experience...).

It is necessary to understand that, first of all, knowledge/experience, and not money allows you to earn and increase yours.

I think more than once you have heard stories about how most people who won millions in the lottery, after a few months or years, returned to the life they lived before (or even fell even lower).

In addition, often in order to learn something, no investment is required at all - the main thing is that there is a desire, and everything else will follow!

If you have free funds, then it makes even more sense to invest some of it in your development: attend trainings, webinars and seminars.

One of the most important differences between investing in knowledge is that no one can ever take it away from you. You can lose everything, but not the acquired skills and experience.

For example, in the USA they conducted an experiment: a professional real estate agent was left completely without money several times in different cities. And the result was always the same - after just a couple of months he managed to earn tens of thousands of dollars from scratch.

CONCLUSION: Therefore, if you don’t yet know where to invest your money, then the safest option is to invest it in yourself (at least part of it). And don’t forget that even a bad experience is also an extremely valuable experience! 👍

Profitability:	Risk:	Payback:	Minimum investment:
endless	minimum	from several weeks/months	from 0 rubles
(⭐️⭐️⭐️ - very high)	(⭐️ - very low)	(⭐️⭐️⭐️ - high)	(⭐️⭐️⭐️ - low)
➕ Pros and ➖ Cons:
(+ ) The most important and most profitable asset in the world is knowledge, skills and experience.	(+ ) No one can take away your knowledge and experience, and you will always be able to turn it into money.	(- ) For many, it is difficult at first to motivate themselves to study.	(- ) It is not always possible to immediately turn your knowledge into money - this requires time and experience.

3. Golden rules of proper investing - TOP 5 tips

And now I want to introduce you to a few more very important investment rules that will help you manage your money correctly!

First, what I already talked about at the beginning of the article is not to keep all your eggs in one basket. This rule especially applies to you if you have a lot of money to invest.

Instead of investing everything in one tool, distribute the amount equally among several parts. For example, into 3 parts and invest them in real estate, shares, or a new business.

If you have very little money, then think about starting your own business.

Second— try to invest most of your funds (40-60%) in assets with the lowest risk; the optimal choice between profitability and risk, in my opinion, is real estate.

And remember that risk is what you need to think about first! Moreover, if you do not have experience and knowledge, then it is in no way worth it to go in on your own and invest all your money in high-risk instruments: Forex, stocks, bitcoins... hoping that you will quickly increase them.

Believe me, this is an already tried path on which hundreds of millions of rubles have been lost!

It will allow you to survive unfavorable times and find other sources of income.

Fourth- create passive income so that you can receive money even when you are not working.

Fifth- before investing your earned money in any specific organization, read reviews and comments about it on the forums. Make sure this is a real company and not a scam.

It will also be great if you learn to give 10% of your profits to charity.

As Socrates said:
There is only one good - knowledge and only one evil - ignorance.

4. Where to invest money to earn money - specific examples

In this section of the article, I will tell you where, based on my experience, I would invest money if I had this or that amount of investment available!

I will not consider very risky investment options in these examples. Let's consider only conservative and moderate-risk investments.

- Where to invest 100,000 - 200,000 rubles?

100 - 200 thousand rubles is not such a large amount, so I would most likely invest it in starting my own business or in the business of my friends. And I would allocate 10-20 thousand to attend trainings and seminars.

As an option, if you do not want to invest in a business, you can consider bonds. As a last resort, you can open Bank deposit, but it will be of very little use, since the interest will only cover inflation.

If the risk allows, you can try to invest in structural products brokers (trust management). Their risk, as a rule, is limited to 10-15% of the investment amount, and you can earn more than with bonds.

- Where to invest 300,000 - 500,000 rubles?

This is also a relatively small amount by investment standards. This amount can already be divided into 2-3 parts and invested, for example, in business , bonds , gold or trust management e.

If there is an option to purchase within this amount real estate at the construction stage, then you can invest in it.

— Where to invest a million rubles?

Having 1,000,000 rubles in hand, you can already try investing in almost any of the instruments described in this article.

For 1 million rubles. It is already quite possible to purchase a rough apartment and an apartment at the excavation stage.

Or alternatively:

You can invest part of the money (RUB 100-250 thousand) in shares promising companies, give them to trust management, PAMM accounts/portfolios, or invest in mutual funds.
But 400,000 - 500,000 rubles can be invested in reliable instruments: various bonds (it is also advisable to divide the amount into 3-5 parts), gold, art objects...
I would still invest a small amount of 30,000 - 50,000 in cryptocurrency, in case it seriously rises in price in the next couple of years.
With the remaining amount you can try to open a business (including on the Internet).

5. Where is it better not to invest money so as not to go broke - important tips on how to avoid fraud

At the end of the article, we’ll talk about something equally important: how not to lose your money and how not to fall for scammers.

The world is full of people who invent various schemes to steal money through fraud. Especially nowadays, fraud flourishes abundantly on the Internet (and not only!).

Therefore, before investing money anywhere, it is worth checking 10 times to see if you will end up with nothing.

Both on the Internet and in real life, people often come across “super profitable” projects that promise to make them millionaires in the very near future. The organizers of such projects offer huge interest rates, fast payments, very profitable terms etc. - all if only people would invest their money.

Take note!
Super favorable conditions- this is the very first sign that they most likely want to deceive you! Scammers love to profit from other people's greed!

Money doesn’t come out of nowhere; if someone receives money, then someone will definitely part with it!

The most common type of fraud is financial pyramids (remember Mavrodi and his MMM). Visually, some plausible story can be created, as if the project is really functioning (providing some services), but in reality the organizers of this project They only make money from the investments of gullible people.

Sometimes the “history” of a project is so well created and worked out that it is very difficult for an ordinary person to detect fraud.

Hype(which we talked about earlier) are essentially also built on the basis financial pyramid and they can also be classified as a fraudulent scheme (although it is also possible to make money from them, but experience is required). You can also add here various casinos and other methods that promise “easy” money.

Another controversial investment instrument is sports betting. It is possible to make money on them in the long term, but only bet organizers and 5-10% of participants (those in the know) do this, and the rest just constantly lose money.

I will also highlight another type of widespread fraud on the Internet - the sale of various courses, programs... which, according to promises, can bring you incredible income in a matter of hours (days). If you buy them, you’ll be throwing your money away (tested in my own skin 😀).

Thus, you need to invest in what you are good at! Otherwise, those who are good at something you don’t understand will profit from you! This is my sad experience.😞

If you are not yet particularly versed in a particular investment object, then invest time and money (it’s not even necessary) first of all into your knowledge ! This will be your most profitable investment!

6. Conclusion

Well, you have learned about all the most popular and profitable areas for investing money.

Of course, it is impossible to fit all the options and all the nuances of investments into one article, but I tried to make the article as useful and interesting as possible for you!

I hope my experience was at least a little valuable for some of you and you have already decided where to invest your money! 😀

Let me emphasize once again that, in my experience, the most profitable investments are investments your own business And knowledge !

❓❓❓
What do you think is the best place to invest your money? Feel free to share your opinion in the comments!

Thank you for reading the article to the end! I wish you successful and profitable investments! 👍💵👍

P.S. If you liked the article, I will be very grateful if you share it on social networks! Also, please rate it on a 5-point scale. 👇 Thanks in advance!

Yesterday, the main market news was a sharp rise in the yield of 10-year US Treasury bonds. The reason for this was the publication of the ISM service sector index, which updated its historical maximum. The 10-year UST yield is now at its highest level in real terms (i.e., adjusted for inflation) since 2011. But even before yesterday's ISM data, most forecasts, including ours, suggested rising 10-year UST yields were on the horizon 12 months up to 3.75%.

This may lead many to speculate that the 10-year UST yield could rise to 4.00% or even higher. How will this affect stock prices? American companies? Previously, it was believed that UST yield of 4-5% should not pose any problem for equity investors. However, quantitative easing has lowered the threshold at which rising Treasury yields begin to weigh on the stock market. Optimists will certainly argue that growth interest rates and bond yields, due to such positive factors as increased rates economic growth and strengthening the price positions of the corporate sector should provide support to the stock market.

Meanwhile, some oil market analysts, taking into account the problems with supplies from Iran and the fact that Saudi Arabia would like to see oil prices above $80/barrel, it is believed that Brent quotes at some point may reach $100/barrel. It has also been suggested that for investors in Japanese and eurozone bonds, the cost of hedging is becoming increasingly onerous. Price Brent oil is already at a 4-year high of $86/bbl, without reacting in any way to the largest increase in US oil inventories this year. Oil prices and 10-year UST yields are closely correlated with inflation expectations, although some argue that income shifts to oil producers resulting from rising oil prices are driving investment out of fixed income instruments.

However, it is worth recalling that weekly statistics on speculative positions from the CFTC indicate a record volume of short positions in UST, which may have a restraining effect on the growth of their yields.

Italy's uncertain fiscal situation and the risk of a new debt and banking crisis in the eurozone could put further pressure on risk appetite. This morning, the yield on German government bonds reached a new 4-month high, and the EURUSD rate as a result of the dollar strengthening by global market dropped below 1.1500 (its next support level may be 1.1300).

In his speech, Fed Chairman Jerome Powell said that “accelerating growth wages in itself is not necessarily inflationary in nature.” Perhaps, in this way, the head of the Federal Reserve wanted to prepare market participants for tomorrow's release of labor market statistics, in which we may see that the average wage growth in US non-agricultural sectors in September exceeded 3.00%. Earlier we talked about how sensitive the market is to rising wage growth rates.

Powell himself is a proponent of abandoning the equilibrium real interest rate (R-Star) as one of the fundamental elements of Fed policy. According to the Federal Reserve's estimates, the neutral value of the nominal interest rate federal funds is around 2.75%, while the current target range is 2.00–2.25%. It is in this regard that in his speech yesterday, Powell reminded market participants that current rate are still below the neutral level. This could be seen as an indirect tightening of rhetoric, assuming the Fed is seeking to raise key rate much higher than the neutral level, however, it is in the interests of the regulator to make such an increase more gradual in order to avoid a sharp correction in the market. Most likely, the FOMC will announce another increase in the federal funds rate, as expected, at its December meeting, which will be followed by three increases of 25 bp in 2019. It is possible that, taking into account current state Investors will begin to price in the possibility of a 50 bp increase in the federal funds rate at some stage.

Not being an economic theorist, Powell is not inclined to rely on indicators that cannot be accurately measured. Powell appears to prefer to focus on actual earnings data. We also noted earlier that the Federal Reserve is more concerned about preserving financial stability - especially now that lending to highly leveraged borrowers has reached $1.3 trillion. Over the past decade, US corporations have been increasing rather than reducing debt, resulting in a in relation to US GDP, it reached a record level. Companies are raising loans to finance the repurchase of their shares - according to Goldman Sachs, the volume of such transactions in 2018 will be about $1 trillion. By the end of 2020, debt obligations totaling about $1.3 trillion will require refinancing. In the United States, about 40 % corporate bonds non-financial sector have a rating at the BBB level, that is, slightly above junk. It is junk bonds, like subprime mortgages in their time, that can become the source of a new financial crisis.

There has been a lull in the trade conflict between the US and China, but probably only a temporary one. Meanwhile, USDCNY continues to stabilize, giving investors hope that China will not use devaluation national currency as a weapon in a trade war. As US Treasury yields rise steadily, China, its largest foreign holder, could continue to reduce the amount of these assets on its balance sheet. Other major holders, including second-ranked Japan, may follow China's example.

In conclusion, we note that the observed rise in bond yields is an important development indicating market concern about the possible increase in inflationary pressures. A clear indicator will be data on average wage growth in tomorrow's report on new jobs in the US non-farm sector. A sharp acceleration in growth could lead to increased market volatility. At the same time, it is difficult to believe that we are on the verge of a significant acceleration in inflation. The IMF estimates that in about 85% of countries that experienced the banking crisis in 2007–2008, output levels are still lower than they would have been if the pre-crisis trend had continued.

Constantly and most importantly guaranteed, receiving a certain income every month is the dream of any investor. Money works without your participation or any effort and brings more more money. How to achieve this? The answer is you need to know where to invest money. Of course, the amount of profit will directly depend on the amount of funds invested. And let’s say, for novice investors, the profit received from their investments will be relatively small. But you have to start somewhere. After all, the very fact of generating very attractive. In order for income to grow, you need 2 things: periodically invest additional money and constant investment. In law - over time, even the most modest capital can turn into a fairly impressive amount, the profit from which will give you a significant financial flow in the form of monthly income from the allocated funds.

Where can you invest money to receive a constant monthly income?

We buy with different coupon payment dates. It is on these dates that you will be accrued profit. You can create a portfolio of bonds in such a way that profits are transferred to your account every month. Typically the coupon duration is 91 or 182 days. Every 3 months or six months, the profit from the purchased bond will be credited to your account.

Advantages. Higher profitability. Clearly predicted and fixed income. High (you can instantly sell bonds without losing accrued profit).

Flaws. The probability of bankruptcy of the issuer that issued the bonds. For blue chips this probability is low. OFZ (bonds) federal loan) and municipal bonds - practically equal to zero. Usually (although very rarely) so-called third-tier companies (junk bonds) go bankrupt. Avoid buying them and everything will be fine.

4. Dividend shares . Buy ones that consistently pay dividends. And not just dividends, but... On average per Russian market this size is 3-6% of the share price. There are companies (but they are few) whose dividends are slightly higher and amount to 8-10%. Judging by the latest payments, these are Surgutneftegaz, MTS and M-video.

The profitability, of course, is still small, but if you consider that you are buying a piece of a working (and successful) business, then with the further development of the company, the profit will also grow.

For example. Share price at stock market very volatile. They can “walk” within 20-30% throughout the year, both up and down. At the beginning of the year, SurgutNeftegazP shares cost almost 50 rubles per share, then the price fell almost 2 times within six months, to 28 rubles. Considering that the average yield is 10% per share (at a price of 45 rubles) or 4.5 rubles, if you bought at the “bottom” at 28, you would provide yourself with a future profitability of 17% per annum. And if the company’s profit continues to grow, then the annual profitability will easily exceed 20%.

Advantages. Having purchased a “piece of business” in the form dividend shares, you will be entitled to a share of the company's profits. You can find it, thereby obtaining an even higher annual return. As the company develops, profits will increase, which means dividends will also increase.

Flaws. Uneven payment of dividends. The lion's share of payments occurs in the second quarter. Some companies pay dividends twice a year. High volatility in the stock market. Shares purchased may drop significantly in value. But if you are focused (several years), then this will give you the opportunity to purchase additional shares at bargain prices.

Finally

It is possible (and even necessary) to receive passive income every month. There is nothing complicated about this. The listed methods are available to everyone. And don't forget. Divide your funds into several parts and use them to make a profit in each way. This will, of course, reduce the overall profit, but you will greatly reduce the risks when investing.

What person doesn't dream of being financially independent? Probably everyone. At least, many people think that it would be nice not to live from paycheck to paycheck, not to count pennies, not to rely on a kind boss and are not afraid to tell him something that he may misunderstand, not to adapt to his mood , and, in the end, do what you love, active leisure, do not deny yourself simple things, such as an annual vacation at sea, entertainment on weekends, apartment renovations, and then a good car and a country house.

For many, these dreams seem like a fairy tale, since people do not know where to get additional income, or simply refuse to invest money somewhere because they are afraid of losing their last savings. This is the syndrome of the 1990s - the syndrome of distrust in the domestic financial system, which failed with enviable regularity. But it is amazing that even in such unfavorable conditions, people have appeared who know how to earn money and invest it wisely, thereby increasing their income. These people lead by example, carry others along with them through mutually beneficial cooperation and increase overall well-being. After all, investments and personal growth are important components of a successful person.

On the Internet, and just in life, you can meet many such people. Their motto in life is “Dream. Target. Real result." They build their own lives. Already in their 20s, they actively and successfully invest money in various financial instruments and are already financially independent, despite the fact that they continue to work at their favorite job. In their blogs, they talk about themselves and their hobbies, and most importantly, about their experience of successful investing. Some of them offer everyone advice and assistance in this matter. Of course, there are scammers among them, but there are also a large number of honest people seeking to attract funds that would bring profit to both investors and themselves.

It turns out that getting 10% income from investments every month is quite possible! The basis of investments is both trust management in Forex and various investment clubs and companies investing in shares of enterprises and projects real sector. Each such company or club is managed by businessmen with an impeccable reputation and has very good results for many years. These companies offer various ways investments - deposits, transfer to trust management, purchase of shares, etc. You can learn about the best tools directly from their publications, by visiting financial websites and blogs, or by communicating in person. Each such company or club, of course, needs to be checked. Under no circumstances should you invest immediately large amounts money to one company or put all the money into one PAMM account. Diversification in this case is the most the right way risk reduction.

It is worth mentioning separately about PAMM accounts. Not everyone can work on Forex on their own. Some people don’t have enough endurance, others don’t have the time to study all the intricacies of trading. A PAMM account provides an opportunity to invest money in Forex without having knowledge and experience in this field. Investing in PAMM accounts is quite safe. Ratings of PAMM accounts on the Internet indicate a profitability of several hundred and even 1000% per annum, and at least more than 10% per month.

Also, practice shows that it is certainly worth investing during a crisis, in particular in blue chips, the price of which in the initial period economic downturn usually drops sharply. In the process of recovery from the crisis, the price of these shares begins to rise. As a result, in a year you can increase your capital by 2-3 times, which again corresponds to 10% per month or more. For example, in the period from the beginning of January 2015 to the beginning of September 2016, the price of shares of Sberbank of Russia PJSC increased three times. Shares of many other companies also rose significantly in price.

Thanks to websites, blogs, and special books dedicated to investing, you can significantly increase your level of well-being and move closer to financial independence. But that is not all! Some of these books are distributed on the Internet completely free of charge to everyone. Books with more detailed description financial markets and investing secrets can be bought for little money. These books will be very useful both to those who are familiar with investing in general and in particular with investing in trust management on FOREX or in shares of large companies, and for beginners. Typically, such books clearly and competently describe the main investment tools.

A novice investor on the Internet and with the help of special literature can easily learn about money and the secrets of effective management of it, about investments, about the rules and principles of investment, about what FOREX is, how you can make money on FOREX and about trust management on foreign exchange market, and finally, about the selection rules investment company, trust, risks and asset diversification. A desktop guide to investing in trust management in the Forex market. Having such books, a novice investor will be able to avoid many of the mistakes that were once made by predecessors due to lack of information.

As in any other business, the main thing for successful investing is the presence of desire. And the rest will follow.

In today's article we will look at the factors influencing the pricing of 10-year Treasury bonds and their futures, find out in what periods investors “flee to safety”, when and to what extent they receive income from bonds, find out why bond yields and their prices are inverse correlation, as well as how their yield curve relates to the economic cycle.

In this article:

How the price of 10-year Treasury notes is determined
What does the interest rate on 10-year Treasury notes say?
What are 10-Year Treasury Note Futures?
Factors Affecting 10-Year Treasury Note Futures

Introduction

Government debt bonds play on financial market important role. During recession and stagnation in the economy, they become one of the main financial instruments into which capital flows. It is in such difficult economic times that investors tend to buy government debt bonds rather than invest in stocks, since the risk of losing investments in the stock market in an economic downturn is very high. Moreover, even in conditions of economic growth, owning only shares of companies is irrational.

Therefore, to protect your investments in the stock and other markets, a reasonable solution is to invest part of your funds in US government debt bonds. When the US government wants to attract funds from ordinary citizens or investors, including other countries, it gives them the opportunity to invest their savings or capital for a fixed period at a certain interest rate.

But why is the US government turning to borrowed funds? The main reason lies in the fact that income receipts and expenditures budget funds happens unevenly. Government revenues are received at certain periods of time (e.g. tax revenues), and expenses occur constantly. Therefore, the government has the ability to borrow short-term funds and pay them back after taxes are received. Besides money market offers relatively cheap resources in the form of debt bonds. To do this, the US Treasury (Department of Treasury), through its Bureau of Public Debt, issues four types of government bonds: short-term Treasury bills (T‑Bills), medium-term Treasury bonds (T‑Notes), long-term Treasury bonds (T‑Bonds ), Treasury Inflation-Protected Bonds (TIPS).

Properties of 10-Year Treasury Notes

US Treasury bonds (long-term Treasury bonds - T-Bond) and notes (intermediate-term Treasury bonds - T-Note) are the object of close attention from all investors in the debt instruments market, regardless of the size of their investments in state debt or the stock market.

Among the various types of Treasury securities, the 10-year Treasury note occupies a unique position in terms of its maturity or duration, making it one of the most closely followed debt instruments, with approximately 60% of all Treasury securities issued. exactly on them.

The 10-year Treasury note is a ten-year cash loan US government. The 10-year Treasury note, or T-Note, offers a yield or rate of return for investing in, essentially lending, money to the U.S. government. Yield, or rate of return, is an important measure of the Treasury market and serves as a guide for determining other interest rates. T-Notes represent the most common medium-term coupon notes securities USA with a maturity of 10 years.

The yield on 10-year Treasury notes is often monitored by the U.S. Federal Reserve System (FRS) and is considered one of the factors influencing the Fed's interest rate changes. Unlike the Fed's short-term funds rate, which is set by central bank, 10-year notes are sold at regular auctions, allowing the free market to set the yield on these notes. The yield on the 10-year Treasury note determines the level of confidence bond investors have in the US economy. Like all Treasury securities, the 10-year note is considered “risk-free” because it is backed by the full faith and credit of the U.S. government and its integrity.

The 10-year notes can be purchased directly through TreasuryDirect.com for a minimum purchase price of $100. They can also be purchased at a bank or from a broker or dealer of U.S. Treasury securities. Derivatives financial instruments These securities are 10-Year T-Note Futures.

How is the price of 10-year Treasury notes determined?

The price of 10-year Treasury notes is influenced by a combination of various factors, such as:

Nominal cost: also called the par value or face price that the U.S. government agrees to pay bondholders when they mature.

Dollar price: This is the dollar amount an investor pays for a bond relative to its face value.

Interest rates: This is the amount of interest that the U.S. government agrees to pay to the holder of the bond over the life of the bond. The rate at which interest is paid and the amount of each payment are fixed at the time the bond is offered for sale.

Profitability: it is a combination of the dollar price and the interest rate the bond pays over its life. It is expressed as a percentage.

10-year Treasury notes are sold through auction on the open market. They are sold to the auction participant who offers the highest price for them. Demand also affects the price of Treasury notes. In case of low demand for 10-year notes, they may be sold at a discount to face value. For the buyer of such a note, this means that he receives a higher interest rate on this debt instrument. Conversely, when there is high demand in the market for these Treasury notes, they are sold at a premium to face value. In such a case, the buyer receives a lower interest rate on such debt instrument.

10-year Treasury notes pay interest once every six months, and the face value is returned in full to the holder at maturity. deadline note redemption. For example, if you bought such a security at an auction and held it until maturity, then in total you will receive the face value plus interest accrued over 10 years.

By purchasing a 10-year Treasury note, its owner can:

To hold it in his possession, awaiting its maturity, receiving at the end of the term the amount he originally paid, called the “principal.” Since this amount is determined by the par value of the bond, the par value of the bond and the “principal” can be understood as identical concepts;
Sell it on the secondary securities market. When he sells a 10-year note, he receives only the current dollar price for it, not its face value, which in some cases can result in an investment loss. 10-year notes may trade on the secondary market at above par, at par, or at a discount.

There are many reasons why bondholders would want to sell or buy Treasury securities in the market, which we'll discuss in the rest of this article.

Interest rate on 10-year Treasury notes

The interest rate on 10-year Treasury securities is the yield to maturity on those most recently sold at auction. Do not confuse this with a fixed interest rate paid. The yield to maturity is determined by the market value of the Treasury price of the security and the coupon interest rate. The 10-year Treasury yield is one of the most widely publicized indicators. financial means information, since it affects many lending rates, such as US mortgage rates.

The bottom chart shows interest rates on the 10-year Treasury note going back to 1962, with periods during economic downturns shaded.

10-year Treasury note futures price chart with 6 decimal places

Factors Affecting 10-Year Treasury Note Futures

When trading the 10-year US Treasury note, futures traders need to monitor a number of different factors that influence its price. Due to their maturities, they are among the most commonly tracked and traded debt instruments. Consequently, although this indicates their sufficient liquidity, the futures and money markets, as well as the secondary securities market, are nevertheless influenced by the psychology of traders and investors. Therefore, below are a number of factors influencing the price of 10-year note futures.

"Safe Harbor": Based on the maturity of the 10-year notes and the fact that Treasuries are backed by the full faith and credit of the integrity of the U.S. government, they are often in high demand as a safe-haven asset. Demand for them, known as the flight to safety, increases during periods of rising geopolitical tensions outside the United States.

The bottom chart shows one such example, where the price of 10-year Treasury note futures skyrocketed in just 24 hours due to the uncertainty of the Brexit referendum result.

Demand for 10-year Treasury note futures surged within 24 hours amid worrying Brexit uncertainty.

Vote of confidence in the economy: Investors often use the 10-year Treasury note yield as a vote of confidence in the U.S. economy. In this case, the principle is that a growing economy encourages investors to shift their funds to high-risk assets, which tend to grow during periods of strong economics. This in turn leads to weakening demand for 10-year Treasury note futures, thereby raising their yields.

The bottom graph shows how for much of 2016, bond investors remained wary of the future of the U.S. economy, pushing yields lower as demand for 10-year Treasury notes grew. After a series of events (such as Brexit, etc.), yields began to slowly rise again and surged upward after the November US presidential election, when Donald Trump promised to increase budget expenses. At the same time, the American economy was moving forward at full speed. Bond yields increased in December 2016 green light To the US Federal Reserve Open Market Committee for a comfortable rise base rate from 0.5-0.75% to 0.75-1%. Prior to this, the Fed raised rates in December 2015. And this was the third rate increase by the regulator over the past 10 years (the Fed radically reduced rates to almost zero value during the crisis of 2008-2009 and has not increased them for a long time since then).

The 10-year Treasury yield (inversely proportional to its value) has been low on confidence for most of 2016.

Treasury yield curve: The yield curve is one of the most important aspects when dealing with bonds or bond futures. A lot becomes clear from the yield curve combined with the current economic cycle. The yield curve is a comparison of the interest rates (yields) of all Treasury securities, from the 1-month T-Bill to the 30-year T-Bond. The 10-year Treasury Note (10-year T-Note) falls roughly in the middle.

In an efficient economy with good growth, yields on the short side of the curve are lower, while on the long side they are significantly higher. In this case, such a yield-to-maturity ratio of Treasury securities helps offset the additional risk associated with the fact that investors' money will be frozen for a long time and they will not be able to use it. When are bond investors confident that the economy is starting to slow down or is at the end of the current economic cycle, the yield curve can change exactly the opposite. In this case, the yield on Treasury securities with short maturities will be higher than that of bonds with long maturities.

The above factors are among the most important and capable of significantly influencing the sentiment of market participants day after day and market value 10-year Treasury note futures. For those planning to trade these futures, it is absolutely necessary to take into account many more factors that can affect their value, including international geopolitical events and macroeconomic indicators, especially from Europe and Japan. US Treasury securities themselves can be considered as one of the worthy investment instruments, but still for the purpose of preserving invested funds, rather than for obtaining real profit.