Wednesday 2 May 2012

What are the Different Investment Types?

By Steve Strong


You will find all types of investments open to you once you enter the arena of stock market investing and mutual funds investing. Actually to people who have never ever considered trading stocks or funds there are all sorts of options that you've likely never thought about that are widely available to those who use various broking services that may be found online or off.

Among the hottest options for the trading public, naturally, is the selling and buying stocks. Buying a stock is the same as buying a tiny bit of ownership in a specific coproration. You will find the average share of stock does not offer you a large piece of the corporate pie by any means but if you've always loved those Kodak moments wouldn't it be pleasant to be well placed to say you are a part owner in Kodak, perhaps then you may feel as if you actually are getting good value. It is certainly inducement to help everybody you know to purchase products to assist in improving your potential returns.

Mutual funds are also very fashionable among the investing public. While they don't work in really the same fashion that stocks work you will sometimes find that you own one or two stocks and/or one or two bonds in the process of owning your mutual funds. These are definitely long term investments but many happy retirements are being built on these funds and they are quite valuable to the average investor who searches for equilibrium and profit in smaller degrees instead of one at the detriment of the other.

Day trading is another type of investing that is gaining no small degree of attention, not all of it good. For some people, day trading is an expedition game though the costs can be quite high if proper care and attention aren't dedicated to learning the best strategies for investing in this very dangerous investment type. Day trading is not really investing so much as it is purchasing and selling quickly in the hope of big profits immediately. Most people consider investing more of a long term commitment but day trading is more like a one-night stand.

Trading penny stocks is another dodgy business in the investing arena but countless millions have been won in lost with these types of stocks. Many of the big enterprises you see noted on the enormous boards today began their trek to the pinnacle of the heap as penny stocks and many find themselves as penny stocks once again when on their way down from the heights of celebrity and infamy. Fraud is rampant in the low priced share arena so make sure that you keep both eyes open if you choose to try to navigate these shark plagued waters.

With bonds you are largely lending cash to the business or agency you're bonding with and they are going to pay you back at an agreed upon time. This is a risk though frankly not as dangerous as other investment techniques. There are many who rely on bonds and those that avoid them like the plague. I prefer to handle bonds only as one part of mutual funds but that's just my private preference. Regardless of if you choose to take on a bond or 2 is strictly your decision too.

As is obvious there are many options for those that have an interest in investing. The difficulty is often choosing the investment type(s) you need to pursue for your financial future.




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