6 Types of Investment You Should Know
You should remember that buying a car, TV or any property is not an investment. Anything that loses value over time after having a theme cannot be considered an investment. There are many investments you can try, but all of them have their own advantages and disadvantages. Investing in bonds, stocks and other financial products are all good choices. If you conduct a thorough research and make the best choice, the following six types of investments may bring you the most benefits.
Most people have experience in investing in bonds because they think investing is safer and easier. Treasury bonds can be considered risk-free assets because the country rarely fails to pay bonds. However, the lower the risk, the lower the rate of return. Over the years, bonds may only bring a 3% return on funds. The rate of return may only cover the inflation rate, and you will not earn additional wealth by investing in bonds. When you withdraw money from bonds, your purchasing power will decrease compared to when you invested.
2. Stock market
Investors with more investment experience can consider stocks. In the stock market, you can invest in individual companies or stocks. Stocks are more risky than bonds. However, this is not the safest and easiest way to make money; it is considered the best way to make money.
You can start from the industry you like and understand. After researching companies in your chosen industry, you can buy stocks and wait for the price to rise. Compared to any other investment type, you can get better returns and retire faster through the stock market.
3. Mutual Funds
Instead of choosing a promising industry and doing your own research and analysis, you can let professionals do the work for you. All you need to do is choose an excellent fund manager and invest in the mutual funds he manages. This is a pool of funds from different investors, which are dispersed into various investments. The fund manager will propose a portfolio of stocks, bonds and other assets. He will analyze economic and market trends to obtain good returns.
However, this also has some disadvantages. Regardless of whether you get a positive return, you must pay a fixed management fee. In addition, there are some closed-end funds, which means that you cannot withdraw funds within a certain period of time. You should arrange your mobility.
As we all know, gold can hedge against inflation, and this reputation is well-deserved. The most obvious manifestation of this significance is the investment value of gold in the era of inflation-banknotes, etc. will depreciate due to inflation, but gold will not. Of course you can invest in gold. But you should know that betting on commodities is usually just a bet, and you are not affected by falling prices. Therefore, bond investment may not be suitable for everyone. You should keep in mind that scarcity leads to increased demand for prices. Understanding global economics is very important.
5. Real Estate
Some of you may not realize that real estate can also be a good investment. If you choose the right area at the right time, listed companies, private companies, apartments, farms, and trailer parks may become suitable investments. For example, if you brought an apartment in New York in 2008 and sell it now, you will make a profit. Opportunity to invest in real estate. If you manage to buy a house worth 50%, you can get a decent return. If you can do this, then it will be a good investment.
However, investing in the stock market may be easier because the price of an apartment is much higher than the stock, and you have to deal with the maintenance of the apartment’s retina.
The price of Bitcoin has recently risen to 20,000 USD. Some people believe that Bitcoin is a better new store of value than gold. However, some people believe that Bitcoin is not an effective wealth storage tool because of its volatility. At present, the market's expectations of low global economic growth and high inflation have not changed significantly. Therefore, Bitcoin will continue to rise in the future, and the price will continue to hit record highs. Investing in Bitcoin is more like speculation. Therefore, you should assess your financial situation and determine which type of investment you want to invest in.