Which Type Of Investment Is For You

Did you know that there are 2 basic securities you can choose from for your investment? Your options are between stocks and bonds, also called equity and debt.

1.    Bonds – technically these refer to any securities founded on debt. Purchasing bonds means that you are lending out your money to the government or to a company with an assurance that you will be paid back in full together with the interest that your money has earned.  While this type of investment is risk-free as you buy bonds from stable entities, the rate of return is lower compared to other types of investments.

2.    Stocks – purchasing stocks makes you a part owner of a business. This means that you receive any profits, referred to as dividends that the company allocates to its owners. Compared to bonds, this type of investment does not guarantee returns. Stocks are volatile. It could give you high potential returns or none at all.

3.    Mutual Funds – buying a mutual fund means you are pooling your money with other investors. Here you are paying a professional manager to choose securities for you. The advantage of investing in mutual fund is that you invest your money in a sound investment without having to know some technical details. More often you get better returns because a professional chooses your investment.

There are numerous alternative for investment these days. You have gold, real estate, FOREX, and the online platform called crowdfunding or crowdinvesting.

Trivia Info Resource: eureeca.com