How to choose the right investment direction for you?

The question “where to invest money?” is usually linked to two goals for private investors: preserving the value of savings over the long term and gradually growing capital by taking on considered, manageable risk. In this article, Kristiāns Purviņš, Head of the TWINO investment platform, shares his view on finding that balance as one of the key tasks in any financial plan.

A simple starting point: assess your time horizon, risk tolerance, liquidity needs, costs, and taxes—and only then choose a specific direction.

Instead of searching for one “best” investment, a more sustainable approach is to understand the selection criteria that help you evaluate different options based on your time horizon, risk tolerance, and financial goals.

5 criteria that help you decide where to invest money

Before choosing specific investment products, it’s important to turn your goals into clear, measurable criteria. This helps you compare options objectively and avoid decisions driven by emotions or short-term trends.

1. Time horizon
   Is the investment intended for the short term (up to 3 years), medium term (3–7 years), or long term (7+ years)?

2. Risk tolerance
   Assess how much portfolio value fluctuation you can accept—financially and psychologically—over your chosen period.

3. Liquidity
   Consider how quickly you might need access to your invested funds. In general, the longer you can keep money invested, the wider your set of options.

4. Costs
   Compare trading commissions, management fees, currency conversion costs, and other investment-related fees—because over time, costs can directly affect net returns.

5. Taxes and legal aspects
   Review how a specific investment is taxed and regulated. Tax treatment can vary by country/region, investment type, and account structure, so it’s worth understanding the rules that apply in your situation.

Popular investment directions: where people typically invest money

Over the long term, it helps to understand how different investment options behave in different market conditions—and how they can complement each other within a portfolio.

Below is a simplified way to think about direction selection based on goal and time horizon (presented without a table for clarity):

If you need the money soon (0–1 year)

What people often choose (examples): savings accounts, term deposits, fixed-term products
Why it can fit: the priority is accessibility and avoiding large fluctuations
What to check: withdrawal terms, interest rate, maturity date

Medium term (2–5 years)

What people often choose (examples): a combination—some funds in more stable solutions + some in diversified funds/ETFs
Why it can fit: balance between access and growth potential
What to check: fees, risk level, diversification

Long term (5+ years)

What people often choose (examples): broadly diversified funds/ETFs, added gradually over time
Why it can fit: time can help you ride out volatility and stay long-term focused
What to check: total costs, market/currency exposure, long-term discipline

If you want more regular cash flow

What people often choose (examples): bond funds, fixed-income instruments (and real estate if you’re willing to invest time)
Why it can fit: focuses on periodic payments, not only price growth
What to check: payout mechanics, risks, liquidity, taxes

If you want it very simple (limited time)

What people often choose (examples): a “single-solution” approach—one diversified instrument + regular contributions
Why it can fit: fewer day-to-day decisions, easier to follow a plan
What to check: automation options, fees, terms

Higher risk (only for a small portion)

What people often choose (examples): individual stocks, crypto (small share of the portfolio)
Why it can fit: higher volatility and uncertainty
What to check: position size, liquidity, your psychological comfort

If you want a deeper comparison between instruments (for example, funds/ETFs, bonds, stocks, and other solutions), we recommend reading our separate article on types of investments.

And if you want to understand how to implement investing in practice and where to begin, you can explore the TWINO investment platform, its terms, and the FAQ section—so the decision is transparent and easy to review.

Practical investment examples (on the TWINO platform)

Below are examples from TWINO platform products. They differ from classic exchange-traded instruments (such as ETFs/stocks) because the investment term and return are fixed. The information provided is for informational purposes; before making a decision, always review the specific product terms and the risk description.

These solutions are often of interest to investors looking for a structured approach with a more predictable interest payment logic.

Asset-backed securities (Loan-backed ABS)

In short: Financial instruments secured by claims against a loan originator—a legal entity that issues and services loans. This means the investment is not directly tied to borrower repayments.

How returns are generated: The loan originator undertakes to provide regular payments to investors, making the cash flow more predictable and structured (with a fixed interest rate).

Key things to know

• Return: fixed

• Payment frequency: monthly

• Typical terms and annual rates (examples):

  • 12 months: 12% per year, paid monthly

  • 6 months: 10% per year, paid monthly

  • 3 months: 8.5% per year, paid monthly

Logic: focuses on monthly interest payments rather than exchange price fluctuations and related market risks.

Convenience: you can use automated investing (Auto-invest)—helpful for saving time and applying the logic of compounding through regular allocation.

Who it often fits: investors who prefer a structured approach and don’t want to monitor markets daily.

Where to learn more

On the TWINO platform, you can find product terms, fees, and risk descriptions. It’s recommended to read them before making a decision to understand how the offering is structured and what limitations apply.

Most common beginner mistakes when investing money

Mistakes in investing most often come from emotions, lack of information, or not having a clear plan. Recognizing them early can significantly improve long-term outcomes (and peace of mind).

Common mistakes include:

• Investing just because “everyone is doing it,” without assessing risk or fit for your goals

• Buying and selling too frequently in reaction to short-term market movements

• Investing without an emergency buffer, increasing the risk of being forced to sell at the wrong time

• Overconcentrating in one asset or sector, reducing diversification

• Changing strategy during market declines instead of sticking to the original plan

Over the long term, what matters more than an “ideal” strategy is a plan you can realistically follow—even when markets are uncertain.

How does TWINO support new investors?

For people taking their first steps, the most important factors are usually safety, clarity, and transparent terms. That’s why it’s important to choose a platform that operates in a regulated environment and offers understandable investment solutions.

Regulation and oversight

TWINO operates under the supervision of the Latvian central bank (Latvijas Banka) and complies with European Union financial regulation. Client funds are segregated from the company’s funds, and in certain cases compensation of up to EUR 20,000 may apply under applicable rules; this is not designed to cover investment losses caused by price changes or market risk.

Structured investment solutions

The platform offers investment products based on real financial assets and built in a clear structure. This can help investors understand how returns are formed and what risks are associated with a specific investment.

Transparent information and reporting

Each investment includes a clear description, along with regular portfolio performance reporting. Clear information about risks and terms helps investors make decisions based on facts rather than assumptions.

Start investing money thoughtfully for the long term

Investing is a long-term process that requires clear goals, disciplined execution, and regular portfolio review. Regardless of experience level, sustainable results are most often supported by the ability to stick with your chosen strategy even during periods of increased uncertainty.

If you want to learn more, review product terms, fees, and risk descriptions on the TWINO platform, as well as the FAQ section. If you need clarification about how the platform works or the technical process, you can contact TWINO customer support or follow updates on social media.

Email: [email protected]
Address: Pērses iela 2A, Riga, LV-1011, Latvia

This material is for informational purposes and is not individual investment advice.