WHAT IS AN NFT?
Non-fungible token. “Non-fungible” more or less means that it’s unique and can’t be replaced with something else. For example, a bitcoin is fungible — trade one for another bitcoin, and you’ll have exactly the same thing. A one-of-a-kind trading card, however, is non-fungible. If you traded it for a different card, you’d have something completely different.
HOW DO NFTs WORK?
At a very high level, most NFTs are part of the Ethereum blockchain. Ethereum is a cryptocurrency, like bitcoin or dogecoin, but its blockchain also supports these NFTs, which store extra information that makes them work differently from, say, an ETH coin. It is worth noting that other blockchains can implement their own versions of NFTs.
NFTs can really be anything digital (such as drawings, music, your brain downloaded and turned into an AI), but a lot of the current excitement is around using the tech to sell digital art.
As with crypto-currency, a record of who owns what is stored on The Blockchain network. The records cannot be forged because the ledger is maintained by thousands of computers around the world
These are but just a few examples of the NFT market.
Lusate is an investment company for digital assets. We invest in non-fungible tokens (NFTs) directly and in companies or funds that have exposure to NFTs and blockchain technology. The company is aiming to even up the investment market for non-fungible tokens, digital entities that allow unique items, such as works of art, to be registered and traded on a blockchain.
NFT’s are the latest innovation to come out of the crypto currency and blockchain industry. They are tokens that allow unique items, such as works of art, to be registered and traded on a blockchain. Existing NFTs, including the first-ever Tweet, have already been sold at auction for eye-watering amounts running into the tens of millions of dollars. However, for most mainstream investors, even wrapping their heads around the concept of NFTs may prove difficult, let alone figuring out how to invest in them.
It is at the crossover between ordinary investors and the new NFT market that Lusate aims to position itself. We provide ease of entry into the NFT market for individuals and companies alike.
“Cash” investments like money markets and CDs have the least risk of all investment types. They can be used to hold money you’re waiting to invest or to lower the overall risk of your portfolio. Cash investments can lower the overall risk of your portfolio and give you a place to hold money while you wait to invest it.
- Cash investments are a place to keep money safer from market risk.
- Your choice between money markets and CDs depends on factors like whether you need to lock in a certain yield and whether you prefer to be covered by FDIC insurance.
Cash investments are very short-term investments. While intended to be stable, they aren’t quite as safe as a bank account. So why bother with them? If you have money you need to keep accessible—because you plan to spend it soon or because you’re holding onto it while you research other investments—you can often earn a little more interest than you’d get in a bank account.
But making money isn’t the goal. Cash investments are meant to provide a relatively low-risk investment option for money you already have.
- Bonds can be issued by companies or governments and generally pay a stated interest rate.
- The market value of a bond changes over time as it becomes more or less attractive to potential buyers.
- Bonds that are higher-quality (more likely to be paid on time) generally offer lower interest rates.
- Bonds that have shorter maturities (length until full repayment) tend to offer lower interest rates.
Bonds are issued by governments and corporations when they want to raise money. By buying a bond, you’re giving the issuer a loan, and they agree to pay you back the face value of the loan on a specific date, and to pay you periodic interest payments along the way, usually twice a year.
Unlike stocks, bonds issued by companies give you no ownership rights. So you don’t necessarily benefit from the company’s growth, but you won’t see as much impact when the company isn’t doing as well, either—as long as it still has the resources to stay current on its loans.
Bonds, then, give you 2 potential benefits when you hold them as part of your portfolio: They give you a stream of income, and they offset some of the volatility you might see from owning stocks.
These are considered the safest possible bond investments.
You’ll have to pay federal income tax on interest from these bonds, but the interest is generally exempt from state tax. Because they’re so safe, yields are generally the lowest available, and payments may not keep pace with inflation. Treasuries are extremely liquid.
Government agency bonds
These bonds are typically high-quality and very liquid, although yields may not keep pace with inflation. Some agency bonds are fully backed by the U.S. government, making them almost as safe as Treasuries.
These bonds (also called “munis” or “muni bonds”) are issued by states and other municipalities. They’re generally safe because the issuer has the ability to raise money through taxes—but they’re not as safe as U.S. government bonds, and it is possible for the issuer to default.
- If you buy a company’s stock, you become a part owner and you’ll generally make money if the company does well—or lose money if it doesn’t.
- Depending on how established the company is, most of the money you make will come either through increases in share price or through dividend payments.
- Larger companies tend to be more stable than smaller companies, but they also have less room for growth.
When people talk about investing in stocks, they’re usually referring to common stock. These kinds of stocks give you the opportunity to join in the success of public companies, and as such, they’re an investment that can really grow your portfolio.
Because you’re a part owner of the company that issues your stock, it’s pretty simple: For the most part, when the company makes money, you make money. (Conversely, of course, when the company loses money … well, you get the picture.)
There are a couple of ways you’ll see this part-ownership reflected.
First, the price of each share of stock can increase in value. If you buy 50 shares at $10 a share and then the share price increases to $15, you’re now $250 richer.
The company can also choose to issue a dividend to shareholders. Say the issuer of your 50 shares of stock announces a $2 dividend. That means you’ll be paid $100 (which you can use to buy more shares, if you wish).
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