We can all invest—reliably with Hapi App Trader—but before deciding what to invest in, it’s essential to understand these key concepts. But first, answer this question:

What is your investment goal?

There are three main objectives—what's yours?

• Preserving the value of your capital
• Generating a source of income
• Growing your capital or speculating

For each of these, there is a different instrument. To define it accurately, we recommend knowing your investor profile as the first step in investing.

Now we can move on to the key terms, which you should not only be familiar with but also fully understand all their implications, because we're talking about your money.

5 Key Investment Concepts:

Return

This is the profit or gain you expect to achieve as a result of your investment. It is usually measured as a percentage of the amount you invested.

Investment Risk

Security prices fluctuate every day, and riskier ones tend to have more pronounced movements.

What is investment risk? It’s a complex topic involving various levels; learn how to evaluate and reduce it in this comprehensive article on financial risk.

Investment Term

This refers to determining how long your investment will last.

It’s important to know that the investment term—whether short, medium, or long-term—is related to the time frame in which you expect to achieve your goal.

An interesting point about this concept is that it allows us to analyze the return on an investment based on the principle of value, as these tend to prevail over short-term fluctuations. What does this mean?

It means that if a company is caught in a scandal, its stock price might be affected in the short term; however, this won’t impact its long-term financial results.

Liquidity Level

The liquidity level is the degree of ease and speed with which any asset can be converted into cash.

This means that the higher the liquidity level, the quicker you can sell an asset, reducing the risk of a value loss when selling it.

Know Your Investor Profile

We mentioned earlier that knowing your financial profile is the first step before investing.

Because knowing your profile will help you make better decisions, it will also help you determine how aggressive or conservative you can be in your moves.

Your profile includes considering your goals, investment term, experience, and your risk tolerance level.

Understanding these five key concepts will help you determine how to invest responsibly, allowing you to choose an investment strategy that aligns with your goals and current situation.

We hope you found this content useful. Share it with more people who want to invest but don’t know how or where to start.

Now that you have your initial plan ready, create your account on Hapi and start investing in more than 12,000 stocks, ETFs, and now also cryptocurrencies.

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