In the mid-20th century investment opportunities were pretty much limited to private investment, a couple of publicly traded companies on the stock exchange and some commodities. The doors for average Joe were also closed. Only major banks, hedge funds and brokers had access to the financial markets.
Fast forward to the year 2025 and investment opportunities are nearly unlimited. The financial markets are also open to anyone over the age of 18, a $100 in their pocket, a smart device and access to the internet. Let’s explore some of the investment opportunities at our disposal:
Equity, or share trading, refers to an investor buying shares in a specific company. The investor has two goals in mind with share trading. One, traders make money from rising share prices and two, having dividends paid out if the company performs well financially. In some cases, dividends can be more rewarding than share price movements.
Money Markets
A money market investment refers to short-term, low-risk investments that are typically used to preserve capital while earning a modest return. A typical example of a money market investment would be a money builder savings account at your preferred bank, giving you a fixed return of say 9% per year. This type of investment usually suits older investors or investors who don’t want exposure to market volatility.
Commodities
Commodities refer to raw materials extracted from the ground. There are two main types of commodities, namely hard commodities (Gold, Silver or Copper) and soft commodities (Grain, Wheat or Coffee). Commodity prices are usually influenced by supply and demand as well as changes in seasons and weather circumstances.
Forex Investments
Forex investment or Forex trading refers to the buying and selling of different currency pairs. This happens in pairs such as EUR/USD, USD/ZAR or GBP/AUD. One major benefit of Forex Trading is that investors can access the market 24 hours 5 days a week.
Bonds
Bonds are instruments that allow investors to borrow money to both private and government institutions with the aims to earn a fixed income based on the interest rate.
Exchange Trades Funds (ETFs)
ETFs refers to a basket of shares. This type of instrument gives traders exposure to multiple shares at once, saving both time and investment costs. It is, however, advisable to carefully pick the sectors you buy ETFs in, as bigger exposure doesn’t necessarily lead to bigger returns.
Digital Assets
Digital assets such as crypto currencies, NFTs and Meme Coins are, due to their nature, more attractive to younger investors. Let’s break down each individual digital asset.
- Crypto Currencies: A digital asset class is seen as an alternative to traditional money. Popular crypto currencies include Bitcoin, Dogecoin and XRP.
- NFT’s (Non-Fungible Tokens): A unique digital asset that represents ownership or proof of authenticity of a specific item or piece of content, typically on the blockchain.
- Meme Coins: A type of cryptocurrency that is typically created as a joke or a fun experiment, rather than for a serious technological purpose. These coins often gain popularity through internet culture, social media, and viral trends.
Private Equity
Private equity refers to investments made in companies that are not publicly traded. Private equity firms typically raise funds from investors to acquire, restructure, or grow companies with the goal of improving their performance and eventually selling them for a profit. These investments are often long-term.
Indices
Indices (or stock indices) are benchmarks that track the performance of a specific group of stocks or other assets. They represent a segment of the market, for example the S&P 500, which includes 500 large U.S. companies, the Dow Jones Industrial Average, which tracks 30 major U.S. companies and the NASDAQ 100 which serves as the largest tech index in the USA. Indices help investors gauge the overall performance of a market or sector and are often used as a reference for comparing the performance of individual investments or funds.
Derivatives
Derivative trading involves buying and selling financial contracts whose value is based on the price of an underlying asset, like stocks, commodities, or forex currencies. Common types of derivatives include options, futures, and CFDs
In derivative trading investors don’t directly own the underlying asset but rather speculate on its future price movements. For example, with a futures contract, an investor agrees to buy or sell an asset at a predetermined price on a specific future date.
Arbitrage Investments
Arbitrage investments involve exploiting price differences of the same or similar assets in different markets to make a profit. The idea is to buy an asset where its price is lower and simultaneously sell it in another market where the price is higher.
For example, if a stock is trading at $100 in one exchange and $101 in another, an investor could buy it on the cheaper exchange and sell it on the more expensive one, pocketing the $1 difference per share. Arbitrage opportunities often exist for very short periods, so they require fast action and often rely on high-volume, low-margin trades. It’s typically considered a low-risk strategy.
The Rise Of CFD Trading
CFD (Contract for Difference) trading had a significant impact on the world of online investing by making it easier for retail investors to access a wide range of financial markets without needing to own the underlying assets. CFDs allow investors to speculate on the price movements of assets like stocks, indices, commodities, or currencies, without buying or selling the asset itself.
The key benefits of CFDs are:
- Leverage: Traders can control larger positions with a relatively small initial investment (margin), amplifying both potential returns and risks.
- Short Selling: CFDs allow investors to profit from falling markets by enabling short selling.
- Access to a variety of markets: CFDs make it easier to trade across multiple markets, including global ones, all from one platform.
This accessibility, combined with the flexibility of trading on margin and the ability to profit in both directions, attracted many individual investors and fueled the rise of online trading platforms
Summary
In this article, we explored a diverse range of financial instruments, from traditional assets like bonds and indices to newer alternatives such as cryptocurrencies and private equity. Each instrument offers unique opportunities, allowing investors to tailor their portfolios to their individual goals. We explored how bonds provide stable income, how indices represent market trends, and how ETFs offer low-cost diversification. Cryptocurrencies introduce high volatility but potential for high returns, while private equity focuses on long-term growth through direct investments in private companies. Whether you’re a seasoned investor or just starting out, understanding these instruments is key to making informed investment decisions.
