Learn of the different types of investments that companies add to their portfolio when investing money to bring in high returns.
If you are looking for a way to invest your hard earned money, there are very many options that you can choose from. The most difficult challenge is deciding on the one that will provide the best returns. You will only be able to make the right choice when you understand the different instruments available. You also have to take a careful look at your objectives and consider what you can afford. The returns of a good investment are sweet. However, if you make a bad investment decision, you put yourself at the risk of losing your money.
Ymhinvesting.com presents as follows the instruments that you should consider when you want to grow your wealth:
- Bonds: Generally safe instruments with fixed returns.
- Shares: These can be risky and income depends on company’s profitability.
- Unit Trusts: A shared approach that can yield good returns.
- Real Estate: A good option for investment stability and profitability.
- Gold: The best investment for value and protection of wealth.
- Certificate of Deposit: Pays fixed rate of interest at the end of agreed term.
- Mutual Fund: You participate in a managed portfolio.
- Exchange Trade Fund: You buy a share in a basket of securities.
Governments and companies issue bond are debt securities. The governments or companies issue bonds when they want to raise money from financial markets. Bonds fall into the category of fixed incomes securities. This is because they pay a steady stream of interest at periodic intervals. This happens throughout the life of a bond.
Shares are another of the different investments that can earn for you. Companies issue shares when they want to raise capital to expand their businesses. When you decide to buy the shares of a given company, you will become shareholder of the company. As a shareholder of a company, you will be entitled to the dividends paid to the shares every year. You can also sell the shares of the company in future if you do not wish to continue being shareholder of the company. Share prices usually fluctuate. The value of the share of a given company can rise or fall over a period of time. Preference shares, called stocks, however, entitles the holder to fixed dividends that takes priority over ordinary shares.
When you decide to invest in a unit trust, your money is put together with the money from other investors and it is used to invest in a variety of assets. The investments that will be made are based on the investment approach and investment strategies and objectives of the parties responsible for making the investment decisions. A person referred to as a fund manager usually manages the unit trust.
Any piece of real property that you buy to sell later or to rent out is an investment. The home that you live in is not considered to be a real estate investment. This is because your home fulfills your basic need. A piece of real property will only be considered an investment if you intend to rent it out for monthly income or if you are planning to sell it in future at a higher price. Read more.
People buy various types of precious items that they can sell in future at a higher price. Precious items include metals such as gold and silver, collectibles, art etc. Gold, however, is top of the list. It is that precious item that has always been considered for value and protection of wealth. Its value has always been increasing throughout history. Read more.
Certificate of Deposit
Banks issue CD’s (promissory notes) in exchange for money. These are basically savings account that are a little different. Instead of being able to withdraw the money in your account any time you want, you will have to leave the money there for an agreed period of time. In return, you will enjoy a high interest rate.
This investment option makes it possible for you to invest your money on assets that are professionally managed. The type of assets depend on the specific fund. The fund can have a variety of stocks, market related indexes, bonds and other investment opportunities.
Exchange Traded Fund
Investors sometime refer to this fund as portfolios of security or baskets. They trade like stocks on an exchange. When you buy an ETF, you are basically buying a share of the overall fund instead of the actual shares of an individual underlying investment.
Other types of investment include mutual funds, hedge funds, savings accounts, term deposits, futures contracts and more. These, including stocks and bonds can be long term or short term. Investment objectives such as interest rates, capital gains and other expectation of profit as well as safety determine the choice of investment.
Useful Links to learn more about different types of investments
Visit Investments and Portfolio Management to learn more on investing your money. You can also download a sample investment policy statement to further guide you in investing. Check out also St. George retirement planning. Best debt consolidation companies