Investment type we must know

Do you really know about investment? Investment is the active redirection of resources/assets to creating benefits in the future.
Investments can be categorized in general terms into three man types:

• Stocks
• Bonds
• Cash

 

Under each of the preceding list of categories are many other investments types. The subject of Investments is a minefield and you have much to learn. The amount of learning you need to absorb can be directly related to the category of investor you fall into. The three main categories of investor are as follows:

• Conservative
• Moderate
• Aggressive

[ Where Should I Invest My Money ]

Under each of the preceding list of investment types one can also be considered a :

• Low Risk Investor
• Moderate Risk Investor
• High Risk Investor

If one is a conservative Investor this generally means that this category of investor, invests in all things relating to cash such as bank savings accounts that pay interest on money deposited in those accounts, other examples are mutual bonds and US treasury bills. These investments are generally deemed as safe investments where a slow growth over many years is expected. This type of Investment is considered low risk.

Investing in cash and bonds is generally the realm of the moderate Investor. This type of investor may also play the stocks and shares market on a small scale, sometimes even the housing market providing the risk is low. Generally moderate investors are considered low to moderate risk takers where investments are concerned.

The stock exchange is generally the aggressive investors play ground where the risks are high. Some aggressive investors like to specialise in investing into new ventures or businesses. Real estate and the housing market is another area aggressive investors like to focus on, this area is high risk as the recent global recession has proved. The gains can be very high in areas of aggressive, high risk investment, however, the losses can be equally as high.

You must learn all you can about the different areas of investment and be aware of the potential risks of loosing all of your money. The money market tends to go in cycles of boom to bust, study your chosen investment path and look at how those investments have performed in the past. At the end of the day investing is a gamble, some gamblers win some lose, the same applies to investing. If you are investing small sums of money in low risk investments then you are less likely to lose and if you do lose it will probably have little effect on your overall financial situation, however, if you are going to risk it all then you need to be very very careful.

Tax Considerations Paying taxes is a necessary evil that most people hate to do. However,
Investing isn’t simple, because traps and pitfalls can instantly destroy your portfolio. However, you shouldn’t

One comment

  1. I think Gold/Silver investment is a nice way. It is really good and a safe way to invest our money. The Gold price will definitely increase in the long run and will benefit us.

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