Seeking financial return isn’t greed. It’s just a survival tool, no matter how hard or not you try. We will reflect on the Return concept and options, in a very local manner, local to Egypt and in a very simple way.

Verb To Invest

It’s a verb, an action. You invest, you get return. That’s not really a revelation, is it? Well, the point is that it requires a choice, an action. If you keep your cash at hand or in your current bank account, don’t blame anyone but yourself. It’s very easy to invest. A Savings account is a bank-visit away. This is actually enough of an investment.

Don’t blame anyone but yourself.

You can take it further and decide to take a portion of your cash and put it into deposit certificates, locking it down for a period of time and getting high interests. You can even go crazy and buy property with guaranteed increasing prices. Surprised? Yes, a house or a diamond stone. This is a good investment.

No Need To Risk

Your grandpa said, “high risk, high return.” Obsolete. There is a point beyond which higher risk doesn’t mean higher return. You got to know this point or ask for help. You’re not smarter if you experiment. Don’t reinvent the wheel. Ask for help instead. Diversification in investments takes your risk down and guarantees higher chances of success.

High risk, high return. Obsolete.

How? Invest in high-risk investments, but not only one of them, rather many. Chances are, out of the many high-risk investments, 80% would fail, but the 20% that will win will give you returns that will oust the rest of your losses.

 

Return On/Of Investment

Wait, is there any difference between On and Of? Yes, huge difference:

Difference between On and Of?

Return On Investment means how much gain you are making from the price difference of the investment you made, e.g. you buy stocks at $10 and sell them at $12; you made 20% Return On Investment.

Return Of Investment means that the $10 stocks you bough represent 1% of the company’s profit share, which gives you access to that profit in the form of dividends. Even if the stock price is still at $10, you make profits as long as the company does and as long as you keep the stocks. This is called Return Of Investment.

 

How Significant is Return Of Investment

In a volatile economy, moderate risk is good. If you bet on a company or a security’s value to jump in the future, this is good.

Egypt is unpredictable now more than ever.

But you would also consider betting the company will yield higher returns in the future. Egypt is unpredictable now more than ever. Diversification is good. A mix of Return On Investment & Return Of Investment is definitely the most moderate and winning combination one can have.

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Written by The Wall Corp Journal

The WCJ team manages the firm's journal and serves as a main platform to broadcast our views, analyses, comments and advice on the economy, investment scene and business outlooks.