Photo: Yield, liquidity, risk. Consider everything well, source: Pexels.com

The investment triangle is a basic tool that helps investors in choosing a suitable investment. This geometric figure has three vertices in the financial world called - yield, liquidity and risk.

The bright and dark sides of each investment can be evaluated on the basis of these three parameters, while it is true that no investment can excel in all factors at once. Therefore, the investor tries to find an asset that would represent a judicious mix in terms of potential profit, possibility of sale and level of risk.

Don't miss: Coins or medals?

The yield attribute indicates how much profit a given investment can bring. Some assets have a given yield – typically bonds – but for most other investments one has to estimate the potential yield based on historical data, current market sentiment or recommendations from investment advisors.

An equally important top of the investment triangle is risk. For experienced investors, this is the most important factor, but beginners often underestimate it. The risk factor describes the degree of probability that a given asset - during the investment horizon chosen by the investor - will fail in price and fall into the red.

"The Czech Mint is one of the leading sellers of investment gold in the Czech Republic. We offer clients commemorative gold coins or medals. In the long term, gold is profitable, liquid, and in terms of risk, it is practically the best of all investments."

The last peak of the investment triangle is liquidity. This parameter describes the time that elapses between the moment when a person wants to sell the investment and the moment when the investor actually disposes of the money from the sale.

The most liquid are stocks, which the seller can usually get rid of within a few seconds. On the other hand, real estate, for which the owner has to look for a suitable buyer, but also bonds that have a given maturity in advance, can be problematic from the point of view of liquidity. In the next part of the Golden Advisor, investment guide of the Czech Mint, we will look at the dictionary of investment terms.

Czech Mint in Jablonec na Nisou

The Czech Mint from Jablonec nad Nisou has been a reliable partner of the Czech National Bank since its foundation in 1993. During that time, it minted 3.5 billion coins. For the CNB, it produces all metal currency that jingles in the pockets of Czechs, i.e. 1, 2, 5, 10, 20 and 50 CZK coins, but also all gold and silver commemorative coins with nominal values of 200, 500, 5,000 and 10,000 CZK .