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Cornell Student Articles on Topical Affairs

The Game Of Investment: The more you stand to lose, the more you stand to gain?

Investment can be a rather uncomfortable topic for those who do not know much of it, as it turns out, that is the majority of the people who want to start making a move towards investment. In its most natural essence, investment is the process of expending ones money into different opportunities (such as financial schemes) in order to earn an extra income or make a profit through patience. The idea of investment of money is to provide oneself the opportunity to have an income even in times of financial fluctuations or when one is not earning a monthly income, or solely for one to live life luxuriously. For Millennials and Gen Z who might be starting to graduate university, the process of investment might be foreign to those who have not studied finance or economics, and even to many of those who have. There are many ways one can invest money, through financial schemes like forex trading or mutual funds, one can also invest money in real estate, or in the forex market. Overall, there are many ways one can enjoy the benefits of investment and live a life of wealth, while some opportunities require patience for several years, others enjoy benefits through trading. Investment is easier if one can hire a professional, for example, a forex broker when starting out or a financial advisor, however, through self-education, many can start making investments by themselves. Millennials and Gen Z need to properly explore all investment options when choosing the best for themselves as each opportunity is different and provides distinct dividends.

Forex refers to the option of investing in “currencies,” basically it is a manner to utilize the foreign exchange rates in the market to buy, sell or exchange currencies. It requires knowledge of current or determined foreign exchange rates. According to Investopedia, Forex currently accounts for a daily turnover of around 5 trillion US Dollars, therefore, it is still the largest market in the world. It is important to understand that foreign exchange rates fluctuate a lot, and hence, so does the market. Moreover, Forex is one of the most regulated markets, while it can be considered a benefit as it limits the level of risk, government involvement can lead to unforeseeable changes in the market. It was also noted that the UK Forex market, which is the leading market in Europe, had a notable uniform period during last year, therefore, it is also not a fully transparent market. Nonetheless, many choose to use Forex because of the ease in investment through online platforms available and the possibility of self-educating on the market. For millennials and Gen Z that want security, understanding, and flexibility of online resources, Forex is definitely an investment option to consider especially if one understands international economic policies.

There are many other options to consider if Millennials and Gen Z decide to put in more research and money into their investments. One of the most important investment markets of all is the stock market. For those that do not know, the stock market represents the portions of public and private companies traded to people, which provides them with ownership claims of invested businesses. Stock markets are most definitely time-consuming and require special knowledge of businesses and the economy, it is mostly always professionally traded through financial advisors because of all the information required to be considered during the investment. Moreover, because one does not know when a business will experience a profit or a downfall, especially in the digital age, it has high risks, however, it has equally high rewards. Many millennials are said to be afraid of this type of investment and prefer not trading in the stock market because of risks such as putting away one’s money for over a decade long period with all the uncertainty of returns. Furthermore, in the United States, recent drops have been seen in the stock market, especially over the holiday period and could witness a potential collapse. Nonetheless, if invested in growing markets such as Cannabis and Technology, or leading companies such as Amazon and Netflix, older Millennials with savings can potentially gain high returns.

Overall, investments can take time to understand and do put one’s finances into risk, however, there are options available to all. Some options one can look into can be saving schemes by banks which although have lower returns also have lower risks. Additionally, one can start investing in real estate if the amount of money saved up allows it and one understands the accumulation of money through properties. Finally, the ever-growing cryptocurrency market is available to those who expect higher returns and understand the technology. Overall, Gen Z and Millennials can decide according to their own savings, risk assessments, and more where to invest their money. In today’s digital era companies are creating platforms to urge the young to invest by opening doors to invest through apps and other online services. For example, Grant Cardone has an online service where one can start real estate investment at as low as 5000 USD. Finally, it is important to note that Millennials view life differently from earlier generations and constantly put an emphasis on living in the moment and creating memories, thus there will be changes in all investment markets that reflect this. Nevertheless, researching opportunities and investing small amounts of one’s income can result to be beneficial. Overall, the “where” and “how” to invest for Millennials and Gen Z will be extremely personal and it will be interesting to see ever-growing markets adapt to the change.

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