7 Types of Investments for a Beginner

Having a sum of money and making it produces more money is what rich people do. One of the ways to make money produces money is by investing your money through investments instruments. There are two instruments that can be used for your investments, financial and Non-Financial instruments. If you are interested in investing your money, learning more about these instruments will help you get richer.

Financial Instruments

Equities

Equities are a type of security which represents the ownership in a company. It is traded through a stock market or also can be purchased directly via the Initial Public Offering (IPO) from the company. For a long time investment, equities is a good type of investment since the returns that can be taken by the investors are commonly higher than most other investment avenues but the risk that can be bring is also bigger than other types of investments.

Mutual Funds

Mutual funds are other types of financial instruments that can be utilized as investments. Mutual funds have lower risk rather than equities, as it has more diversification, so if any one security does poorly, the others are there to back up the risk. Moreover, it has lower costs than equities since you pay one low expense ratio instead of racking up the commissions you would pay when buying and selling individual securities yourself. In addition, there is professional management that can keep track of every security your mutual funds owns and there are many kinds of general and thematic mutual funds that someone can choose to meet their needs as every funds offer different return possibilities.

Bonds

If you want a fixed income instruments, bonds may become one of the financial instruments that can be considered to have. Bonds are issued for the purpose of raising capital. Private entities, such as companies, financial institutions and other government institutions use these instruments to get the lowest level of risk but could deliver fair returns.

Deposits

Deposits are the lowest risk type of investments and it is the most common way to gain surplus funds which is provided by your banks.

Non-Financial Instruments

Real Estate Investments

With the growth of population, the cost of land continuously increases in this sense putting your money in property investment will never fail you. It will give you a high return with a low risk. This is why real estate has become a profitable investment instrument.

Gold

One of the most preferable investments is Gold. The price of gold hardly experiences significant reduction, yet increase or stay steadily. That is why Gold investment becomes everyone’s favorite. Furthermore, any products which are produced from this material will be also suitable for investment. This means any information related with gold, such as gold futures or gold exchange traded funds is very valuable to be followed.

 

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