Q&A with Apricot: How Do People Make Money with Investing? Example 1: Preserving the Value of Your Money aka Capital Preservation

Ever asked yourself, “But how do people actually make money with investing?” There’s no single answer. The way people make money varies and depends on their goals. In our Q&A series, we’ll explore some of the most common scenarios and how people invest in each.

In this post, let’s explore the example of people who have savings and want to manage them so they don’t lose value over time due to inflation, and potentially earn a bit more. These people could choose to invest in government bonds.

This goal, in investment lingo, is called “Capital Preservation.”

How do bonds work?

Think of a bond like a loan you give to the government (or a company in the case of corporate bonds). In exchange for your investment, the government agrees to pay you back your initial investment plus regular interest payments over a set period. Learn more about bonds here.

Why do people choose government bonds for capital preservation?

• Low risk: Government bonds are generally considered a low-risk investment because they are backed by the government’s ability to repay its debt.
• Steady income: Bonds provide regular interest payments, offering a predictable income stream.
• Diversification: Bonds can help balance the risk in your investment portfolio, especially when combined with other assets.

Bonds vs. bank deposits:

This is a common and natural question. Learn more about the differences here. 

Interested in investing in bonds?

Learn more about how to invest in bonds through Apricot Capital.

Open a brokerage account  for free and download our Apricot app from the App Store or Google Play.

It’s important to remember that investments are subject to market fluctuations and carry inherent risks. Consider your financial goals and risk tolerance before investing.

Apricot Capital is regulated by the Central bank of Armenia.

*The examples in this text are for illustrative purposes only. This does not constitute investment advice or a recommendation to buy or sell any specific investment instrument. The past performance mentioned in this text is not indicative of future results.