Types of Investments - How They Make Your Money Grow
By Bruce A. Hoover
Are you trying to decide the types of investments you need to be associated with to make your money grow? Investments tend to fall into three broad categories. This includes cash, bonds and stocks. This is where the simplicity of the subject ends and it starts to get rather complicated from here on. The main reason is each of these broad categories has a number of sub-categories associated with it. This article will focus on the types of investments we think you should be associated with.
Each investment type comes with a lot of knowledge about how to use them effectively. However, you should also take note that the amount of information you need to master for any particular type of investment is directly related to the type of investor you choose to be. You can choose to be an aggressive, moderate or conservative type of investor. While keeping in mind that these investor types also are related to two levels of tolerance of risk. That is low risk and high risk.
Investors that consider themselves conservative investors tend to invest in cash. There investment decisions usually have them investing in Certificates of Deposit, Treasury Bills, Mutual Funds, Money Market Accounts and interest bearing savings accounts. The main idea is that these investments are the safest available while still being able to grow over a long period of time.
The Moderate type of investor will usually involve themselves in bonds, cash and a little stock trading. Their main point is to keep risk to a moderate to low level. Moderate investors may also find themselves investing in low risk real estate.
The Aggressive investor tends to concentrate the vast majority of their investing time and effort directed at the stock market. There investment portfolios can also include higher risk real estate and business ventures. There main motto is simply buy low and sell higher. Of course by including more riskier investment options into their portfolio they have to balance risk and reward to a much greater degree then the other two types of investors.
We would suggest that before you get your big investment plan started that you understand the various types of investments available to you and their associated risk and reward characteristics.
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