Bonds
Grouped under the General category is called fixed-income securities, long-term bonds are typically used to describe titles that are based on the debt. When you buy a bond, you are ready money to the company or the Government. In return, they agree to give your money you are interested in and eventually pay you back the amount you pay.
The main attraction is their safety from the obligations. If you buy a government bond is stable, investment is almost guaranteed, or without risk.
Security and stability, however, comes at a cost. Because there is little risk, there is less potential yield. Accordingly, the rate of return on the bonds is usually lower than other securities.
Stock
When you buy a stock, or equity, an advisor you would write, you become the owner of the company. This vote at a shareholders ' meeting and allow you to receive the benefits of the company allocates to its owner. The benefits of this are designated as dividends.
While the bonds provide income flows, the volatile stock. That is, they fluctuate in value every day. When you buy shares, you're not guaranteed anything. Many stocks even not to pay dividends, in this case, the only way you can win money is if the stock increases in value that may occur.
From bonds, stocks offer a relatively high yield potential. Naturally, there is a price to these possibilities: you should consider the risk of losing part or all of your investment.
Mutual funds
Mutual funds are a set of actions and obligations. When you purchase a mutual fund, collect you your money with a number of investors, which (as part of a group), allows you to pay for a professional Manager select special effects for you. The mutual funds equipped with a certain strategy in mind and their objective is different can be almost anything: major actions, actions, obligations from the obligations of the Government of companies, the stocks and bonds, shares in certain industries, stocks of such and such a country, etc.
The main advantage of mutual funds, is that you can invest your money without the time or experience which is often necessary to select a good investment. Theoretically, you should get a better return by giving your money to a professional if you choose the investment yourself.
Alternative investments: options, futures, FOREX, gold, real estate, etc.
So, now you know about the two basic: titles of participation and debt relief, better known as the actions and obligations. While most (if not most) investments fall into these two categories, there are a variety of alternative vehicles, which represent the types of more complex securities and investment strategies.
The good news is that you probably do not need to worry about alternative investments at the beginning of your career investment. They are titles are generally high-risk/high-reward is more speculative than regular old shares and obligations. Yes, there is a chance for profit, but they require specialized knowledge. So if you do not know what you do, you can enter yourself in many problems. Experts and professionals recognized generally that new investors should focus on the creation of the foundation of Finance before speculating.
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