Investment options – The different types that you should know about | Get Financial Freedom Tips | Transform Your Financial Future


Thursday, October 17, 2013

Investment options – The different types that you should know about

When you start earning money, the first most important thing that you might want to consider is investment. You should have a thorough idea of what investments are. You should also know the different types of investments and their benefits. Unless you have a clear idea about investments, your hard-earned money will be in danger.  You can go for a self study or you can take help of a professional in this regard. This will help you in safeguarding your hard-earned money in the long run and will also help you manage your financial health better.

Different types of investment options

You will be able to find different types of investment options in the market. Let’s take a look at some of them:
  • Investment in stocks: This is one of the oldest as well as popular forms of investment. In this investment option, you will be able get a part ownership of a publicly traded company. A large number of people invest in stocks.
  • Money market account: Another form of investing money is to go for money market account. It will be a kind of savings account where you will be able to qualify for a competitive interest rate in return for huge deposits. Quite a number of people go for this investment option. 
Investment options – The different types that you should know about
  • Exchange traded funds: Also popularly known as ETFs, many a times, they are referred to as baskets or portfolio of securities. This portfolio of securities will help you in trading like stocks on an exchange. Thus, while you purchase any ETF, you are actually buying shares of the overall fund. You are not just simply buying shares of a particular underlying investment.
  • Mutual funds: In the option of mutual funds, you will be able to invest your money in a well-managed portfolio of assets. This portfolio of assets will depend upon specific funds and will contain a range of options like market related indexes, bonds, stocks, etc.
  • Bonds: This is one more common investment option. In this investment option, you are actually giving out a loan to any institution or the government in return of a pre-determined interest rate for a given period of time. The bond will help you get an interest while it is active. However, it will expire on a given date and after that the investor will receive the total face value of the bond. It should be noted here that if you sell off the bond in between the time it is issued and it matures, then you will experience a profit or loss depending on the price of the bond.
There are various organizations and companies which will help you in investing your money and get the best returns. While choosing any investment company, you should do the required research so that you do not fall prey to scammers. Also, before you choose to invest your money, you should make sure that you have a clear idea about the various investment strategies in order to be on the safer side.

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