Investment Funds As Options for the Starter Investor

Investment funds, also known as mutual funds, have become increasingly popular as an alternative to actively investing in individual stocks. This is because mutual funds offer a variety of benefits not available through an active investing strategy.

For starters, mutual funds provide investors with the opportunity to diversify across many different stocks and sectors, helping to reduce risk within a portfolio. This type of diversification also means that investors are not overly exposed to a single stock or sector, making it easier to weather potential volatility and ensuring greater profitability over the long-term.

Mutual funds also usually offer a lower minimum investment amount compared to investing in individual stocks, providing investors with increased flexibility and access to a larger range of stocks than they could traditionally afford.

investment fund names on a digital screen

Mutual funds also tend to be managed by highly experienced professional money managers, who continuously research and monitor the market in order to make the most informed decisions possible when allocating assets. This ensures that investors are not relying solely on their own research and analysis when making their investing decisions, something which can be particularly beneficial for those who are inexperienced investors or lack the time to adequately manage their own portfolios.

Overall, investment funds can be a great option for those looking to invest in stocks without having to conduct extensive amounts of research and actively manage their own portfolios. They allow investors to benefit from the expertise of professional money managers, diversify their portfolios, and often require a lower minimum investment amount than is traditionally necessary when investing in individual stocks.

Why some governments are offering investment funds as way for residency by investment

Governments are offering investment funds as a way for residency by investment to attract foreign capital and stimulate economic growth. This strategy is appealing to high-net-worth individuals and families who want to invest money in a secure environment, as well as to wealthy entrepreneurs who want to expand their businesses.

Through this method, governments are also able to create jobs, attract new businesses and increase economic activity, thereby helping to enhance their economic output. Additionally, by offering a residence permit to invest in their country, governments can gain access to new markets, increase international trade and attract more technology and industry.

Ultimately, this strategy allows governments to increase their revenue and benefit their citizens.

The Portugal Golden Visa Fund Case

Portugal is commonly known as a study case on how it implemented a residency by investment scheme that has been attracting foreign investors for more than a decade now. And one of the options available for the investors, it’s the Portugal Golden Visa Fund

  • Equity Investments: Portugal also offers a Golden Visa scheme for investors looking to invest in equity-based businesses. The applicant must hold at least 10% of the total share capital of the company and must also prove an investment of over €350,000 within the first five years.
  • Small Investment: Portugal also offers a scheme to foreign investors looking to start a small business or invest in a business that has been in operation for at least 3 years. The minimum investment must be €280,000.
  • Public Debt Securities: Investors may also obtain a Portuguese Golden Visa through the purchase of public debt securities issued by the Portuguese government, such as government bonds and treasury bills. The minimum investment is €1 million.
  • Capital Transfer: Investors can also obtain a Golden Visa through the transfer of capital to a Portuguese bank. The minimum investment must be €1 million.
  • Capital Investment Funds: Investors may obtain a Golden Visa through the participation in capital investment funds that are dedicated to the financing of small and medium-sized Portuguese companies. The minimum investment is €350,000.

Other Investment Options that Apply for the Golden Visa

  • Cultural Heritage: Foreign investors may also obtain a Golden Visa through the renovation of properties of artistic or historic value, with a required investment of €350,000.
  • Real Estate Investments: Investors can obtain a Portuguese visa by investing in real estate located in Portuguese territory, either through a purchase of already-built housing or through the development of a new building. This allows foreigners to own or construct real estate projects, transfer their capital to Portugal, and benefit from the Portuguese tax-relief system.
  • Job Creation: The Portuguese Golden Visa Program also provides a pathway for foreign investors to obtain a visa through job creation in Portugal. The applicant must create at least 10 jobs, in an eligible sector, within the Portuguese territory and prove an investment over €350,000 within the first five years.
  • Research and Development: To receive a Golden Visa, investors may choose to participate in projects related to research and development in the fields of biotechnology, new materials, renewable energy, and other related industries. A minimum investment of €500,000 is required to qualify for this type of visa.