Best ways to invest in Europe for having profitable returns
Investments have become an integral part of human life these days to have a better financial future along with standard income. While the majority of the people start with domestic investments, some expand their portfolio by International investments. The strategy helps them to invest in different kinds of global financial instruments apart from regular stocks and bonds like options, futures, Forex and so on.
International investment exposes investors to the risk of foreign financial markets and many of the foreign financial instruments help you to achieve high return rates.
Europe being the hub of premier corporations of the world and having 20% of the global GDP is an excellent choice for international investment. The following points will let you know how to invest profitably in Europe.
By investing in European P2P websites
P2P websites allow to make money online but connecting a network of investors and borrowers without any financial institution intervening in between. As an investor, you put your deposit in the P2P lending platform. The website then allows you to choose loans based on your deposited amount. Once you choose the loan and grant it to the borrower, interest rates start getting applied to your investment amount till the borrower’s pay-back period. As a result, compared to your investment, you withdraw the amount with higher returns from the website due to applied interest rates on it. Some of the famous European P2P websites for investment are- Mintos, Grupeer, Bondora, and Fast Invest.
By investing in mutual funds
Mutual funds are known as Unit Trusts in the UK. Choose to invest in the companies that are headquartered in Europe or the ones that have a widespread business across the entire European continent. So, when you pool money in the UK mutual funds as an investor, the fund manager uses your money to buy different shares and lets you make money by selling them at a higher price. The minimum investment amount varies from 250, 500 to 1000 pounds. You can choose to invest in different trusts for maximum returns like:-
- Trusts with immediate returns, Ex- UK General Bong, UK Gilt, Global Bond, Managed Income.
- Trusts with growing returns, Ex- UK Equity income
- Trusts with capital growth, Ex- the UK All companies, Global Growth.
By investing in ETFs
European ETFs are another great source of investment due to their simplicity and low investment costs compared to Mutual funds. ETF investment follows almost the same process as Mutual fund investment. You can make ETF investments in stocks, bonds, commodities as well as indexes. The returns of ETF investment are based on the type of investment you are making. For example- If you make a stock investment, your returns will be based on capital gains + dividends of the stock. However, if you make a bond investment, for example- Real-estate ETF, your returns will be based on the interest rate on rents, property sales or service income generated from your invested real estates.
By direct investment in European stock market
The final way to invest in Europe is by directly entering its stock market. For this, you need to do research on the European stock market, their different stock exchanges like Euronext, Nasdaq Nordic, London Stock Exchange and so on. Each of the European countries has different stock market hours and executes trading as per that. You can invest in European Mutual Funds, ETFs as mentioned- above or go for GDRs to directly purchase a share of any European Blue chip multinational company. These companies have increased growth of profits rates annually and hence your chances of making profits from the dividends become higher. However, there is a risk factor associated with the same. If you are not a US resident, the added commissions in each step of trading make the investment pretty expensive.