Everyone of us know that it is essential to invest a part of our money to let it multiply yet many us haven’t still explored that option. The reasons might be many, lack of proper knowledge, fear of taking risks or mere lack of interest in investing. But if you want to make a start now, then i am with you. For i am a beginner too in this venture, hence i am going to completely familiarize myself with the basics of investment before i set out to put my money in the market. So i thought why not share what i learn with my readers.
Today i am going to share with you a little about different types of investment. For a person like me who thought that investment was all about mutual funds and stock market , this lesson was very shocking as well as informative. Now without further delays let me explain in brief what i learnt today.
Types of Investments:
Cash Investment includes:
* Savings Bank accounts
* Certificate of Deposits
* Bills of Treasury
Features:
Low interest rates
Higher risk when inflation is taken into account
Debt Securities include:
1. Debentures
2. Bonds
3. Deposits
4. Notes
5. Commercial Paper
The concept behind this type of investment is that, you lend money to the agency from which you purchase a bond(or any other debt security product) and receive repayment in terms of interest.
Features:
* Provides returns in the form of fixed regular installments.
* Possibility of capital appreciation on maturity
* Safer compared to equity
* Returns are lower compared to other securities
* Higher interest rates than cash deposits
Equities or Stocks:
When you purchase stocks you are given a share of the company’s ownership. If the company makes profit, so do you. However this option is more volatile and riskier compared to bonds.
Since i do not want to overburden you with information, this is it for today, we’ll be covering the remaining 4 types tomorrow. Meanwhile try and gather more knowledge about these three types.At least thats what i am going to do.
