Types Of Investments
General, there are three different types of investments. These include stocks, bonds and cash. Sounds simple,unfortunately, it gets very complicated from there.Each type of investment has numerous investments that fall under it.
There is a lot to learn about each different investment strategies type. The stock market can be a big scary place for those who know little or nothing about investing. You need to learn and understand the mechanics and also the amount of risks you can undertake.Three types of investors:
Conservative, moderate, and aggressive. The different types of investments also cater to the two levels of risk tolerance:
High risk and low risk.Conservative investors often invest in cash. This means that they put their money in interest bearing savings accounts, money market accounts, mutual funds, U.S. Treasury bills, and Certificates of Deposit.
This is very safe investments that grow over a long period of time. These are also low risk investments. Moderate investors often invest in cash and bonds, and may dabble in the stock market.
Moderate investing may be low or moderate risk. Moderate investors often also invest in real estate, providing that it is low risk real estate.
Aggressive investors usually do most of their investment in the stock market, which is higher risk. They also tend to invest in business ventures as well as higher risk real estate. For example, if an aggressive investor puts his or her money into an older apartment building, then invests more money renovating the property, they run a risk.
They expect to be able to rent the apartments out for more money than the apartments are currently worth or to sell the entire property for a profit on their initial investment.
In some cases, this works just fine, and in other cases, it does not. It's a risk. Before you start investing, it is very important that you learn about the different types of investments, and what those investments can do for you.
Understanding the risk, and take into account past trends as well. History does indeed repeat itself, and investors know this first hand.
Types Of Investments
