With bank accounts paying such miserly interest these days, it’s small wonder that many prudent savers have taken up home investment.

As inflation hovers around 3% the fact is that many people’s nest eggs are diminishing in value. But there are ways of making your money work harder for you, and we look at some below.

When it comes to matters financial, risk equals reward. Bank accounts might be generating next to nothing but the chances of losing what you have are minimal. Other forms of investment that generate much greater yields, Greek Government Bonds for example, do so because they bring with them the far greater risk of the investment being lost.


Portfolio Theory

For professional investors, Portfolio Theory is key. This is the spreading of an investment across a number of assets to achieve the best income potential for a certain amount of risk, which will vary with the investor or client. The pros have far greater resources at their disposal than the home investor, meaning they can ensure their investments are based on a sound understanding of each asset. How much the home investor sticks to Portfolio Theory depends on the fundamental importance of their investment and the extent of their knowledge. Novice investors should start off investing only smaller amounts and getting to know one or two fields well before spreading too much.

Shares

Share dealing trading accounts are one of the best ways to get involved with home investment. The amount of information available to the investor is huge and there is an extremely sophisticated market out there for people looking to get started. Various online accounts are available, enabling investment in a very wide range of different assets. The information offered through online portals like TD Direct Investing keeps users’ fingers on the pulse while commissions are competitively priced and tax efficient vehicles like Trading ISAs are available.

Commodities

Perhaps the greatest success story of the post-Lehman investment world has been gold. In five years, it has risen in value by a staggering 143%. At the root of its value is the fact it is coveted and in particularly finite supply. That is the essential model for all commodities, be it precious metal, oil or agricultural products. While economic issues of course affect commodity prices, more predictable physical and political factors also feed into price performance.

Alternatives

Home investment has never been easier with online portals now so common, but a home investor can also get more creative with their money. The instability of traditional assets, as well as the rapid rise of Eastern powerhouses such as India and China has seen alternative investments rise in popularity. Works of art are fetching higher and higher prices and an astute eye can lead to significant gains without having to invest millions, while newly opulent nations’ taste for the high life has seen wine investment take off. Provided you can withstand the temptation to drink them, investing in the right bottles can lead to major growth.

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