As we have mentioned in the past articles, investment has a wide range of programs, types and/or strategies one can choose from. Learning most of them may help you in choosing the proper flat form to enter.
In this article we are going to discuss some of the most known types of investment. After this you may opt to choose depends on the risk level you can tolerate and understand. There are types like the Exchange-Traded-Fund or ETF, Mutual Funds (MF), Individual Stocks, Stock Market, Bonds, real states and more that you can learn on further reading and researching.
It is a type of investment that makes you a part owner of a certain company you invested with, which gives you the entitlement to a portion of that company’s value and income.
Though tagged as the most risky type of investment, putting your money on buying stock is still the most profitable. It is also the most advised investment program financial advisors give to their new client who are willing to put away their money in a certain period of time.
If you are into volatility and scared to take too much risk, you may opt to invest in an investment like bonds.
Bonds is an investment scheme which is technically a debt obligations offered by companies and treasuries in trade for an interest plus the face amount of the actual fund loaned when it matures. What makes’ bonds better than any other investment program is that it pays investors a set amount over a period of time regardless, if the company gained or losses.
Since bonds are low risk investment, it is also one of the low profit gainer.
This investment type came from pooled source of money from different investors which is managed by a broker or investment manager. Once the right amount capital is formed the investment manager then invest it stocks, bonds and another investment program.
Mutual fund however is only traded once in a day not like stock market and ETF (which we will discuss later) which is traded in the stock exchange the whole day. Buying and selling of shares in Mutual Funds can only be executed after the market close.
Mutual Fund is the usual choice of beginners because unlike in stock market that you yourself monitor, MF is handled by a professional fund manager who makes the necessary decisions for your investment.
Exchange-traded-fund or ETF is like a mutual fund in ways because funds are diversified in many investment modules across the industry the only difference is… ETFs are traded on the stock exchange during the every trading day just like shares of stock, unlike mutual funds which are valued at the end of each trading day; ETFs are valued constantly while the markets are open.
Many ETFs track passive market indexes like the S&P 500, the Barclay’s Aggregate Bond Index, and the Russell 2000 index of small cap stocks and etc.
Alternative Investments are not under conventional equity or cash class. Not like most traditional investment type, Alternative Investment is somewhat extensive and tends to have higher fees.
Private ventured business like real states, crowd funding, lending or hedge funds, online businesses and many more are most of the samples of alternative investments.
Alternative Investment is a bit broader than the traditional way of investing since its many classifications. We will discuss more about it in the coming days.
For now, browse and click more on Redwood Capital Management Limited to know more about what we can offer for your financial needs.