Posts Tagged ‘types of investments’

Different Types of Investments

Thursday, April 30th, 2009

There are three different types of investments.  These include the stocks, bonds and cash. Each type of investment has several types of investment that falls under it.

You have to learn about each and every type of investments. Stock market could be a scary place for those who know little or who knows nothing about investments.  What you need is thorough knowledge and information to learn all the direct relation to the type of investors that you are.  There are three different types of investors. These are the conservative, moderate and aggressive types of investors. These different types of investors also cater to the different types of risk tolerance; the high risk and low risk.

The conservative type frequently invests in cash.  It means that they put their money in the interest bearing the savings account, money market accounts, mutual funds, US Treasury bills and Certificate of Deposits.
These are very safe investment that can grow over a long period of time and these are low risk type investment.

Likewise, moderate investors frequently invest in cash and bonds.  They may also play at the stock market. They also invest in the real estate. These are low risk type investment too.

Aggressive type of investors commonly do most is to invest in the stock market.  They also venture into real estate with high risk investments.  This is when they invest in an older apartment building, then invest more money in the renovation of the property.  Then they expect to be able to rent the apartments out for more money that the apartment currently worth or to sell the property for a profit for their initial investments.  Some cases work out just fine but in other cases it does not.  This is high risk type investment.

It is better to learn about the different types of investments before you invest.  Keep in mind the risk involve and pay attention to past trends as well.
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Types of Bonds

Tuesday, February 3rd, 2009

If you are about invest and never knew what investment is all about, then you should try to invest only to a smaller amount to be able to know how your investment will work.

It is better to invest in bonds because it is safe and the returns are very good.  These bonds have four different types and these are sold through the Government, through corporations, state and local governments, and foreign governments.  The good thing in bonds is that you will get your initial investment back and this makes the bonds the perfect investment vehicle for those who are new to investment.

In the United States, the US government sells the Treasury Bonds through the treasury department.  If you are interested, you can purchase Treasury Bonds with maturity dates ranging from three months to thirty years.  The Treasury Bonds includes Treasury Notes (T-Notes) and treasury Bills (T-Bills).  All Treasury Bonds are backed up by the US Government and tax in only charges on the interest that the bond earned.

In a private corporation, corporate bonds are sold through public securities market.  A corporate bond is basically a company selling its debt, and usually these bonds have high interest rates but these are too risky. If the company regains, the bond is actually worthless.

State and local government also sell bonds but these are different bonds issued by the federal government.  These bonds have higher interest rates because the state and local government has the tendency to be bankrupt unlike the federal government.  State and local government bonds are free from income taxes even from the earned interest.  State and local taxes may also be waived.

Buying foreign bonds is really very difficult and often done as part of a mutual fund.  It is still very risky to invest in foreign countries.  The safest type of bond to buy is the one issued by the US federal Government. Interest may be a little lower but there is a low risk involved.

The best thing to do is when a bond reaches maturity, reinvest it to another bond.

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