Type of Investment

When you invest, the company or government entity within which you invest in, offers an expected future benefit in exchange for your funds. These organizations compete for your funds. Investors can invest within the organization that they decide to be better than what the competitor offers. different investors will decide benefits differently. As a result of this, there are many kinds of investments available, from sure bets such as the interest earned in a savings account or CD, to the chance of earning big returns fast by investing in some hot new stock. The investments you decide on will depend on your goals, tolerance to risk, and resources.

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1. Securities/Property

Securities are investments that are debt, ownership, or the legal right to acquire or sell an ownership interest. Common types of securities are stocks, bonds, and options. Property, on the other hand, is an investment in real property or tangible personal property. Land and buildings are the examples of real property. Examples of tangible property is gold, artwork, antiques, and other collectibles.

2. Direct and Indirect

When an investor directly acquires a claim on a security or property, it is known as a right away investment. this may be when you buy a stock or bond in order to earn income or expect it to increase in value. an indirect investment is when an investment is created in a assortment of securities or properties. the aim of this is to invest in a very professionally managed assortment of securities or properties.

3. Low or High Risk

Sometimes investments are differentiated on the basis of risk. Risk is the chance that actual investment returns will differ from those expected. The wider the range of possible returns or values of an investment, the greater the risk. Investors can choose from a wide variety of investments with varying degrees of risk.

Low risk investments are considered safe but high risk investments are considered speculative. Speculation offers a high level of uncertain returns and future value. Because of the perceived greater risk, greater returns associated with it are expected.

4. Short or Long Term

Investments can be described as two term, that are short and long term. Short term investments usually mature within one year, while long term investments are those with longer maturities, or no maturity at all.

Source : ezinearticles