An investor is someone who invests capital in the hope of gaining investment or profit within a specified time period. Different types of investments include property, equity, securities, money market instruments, foreign exchange, commodities, precious metals, equities, derivatives including put and call options and futures, and so on. The different types of investment are classified into different categories depending on how much money is invested, the nature of the asset being acquired and its risk tolerance.
It is important for investors to decide what type of investment they want and whether they are willing to pay the risk or not. The type of investment that they choose depends on their ability to control the risks of the investment and also their confidence level.
The different categories of investments have varying risk profile. This means that they carry different risk profiles which can include a low risk of loss and also high returns of potential profits. Each category has its own risk factor that varies according to the investment and the time period. The categories of investment are as follows:
Mutual Funds. Mutual funds have multiple categories of investment ranging from bonds to equities, treasury bills, marketable securities and so on. A mutual fund is an investment vehicle that is managed by a fund manager. Mutual funds offer diversification by combining multiple categories of investment in one portfolio. These funds invest in large companies and are managed by investment managers who specialize in various areas of investment.
Bond. Bond investing can be considered as an alternative to stock investing. Bond investing involves buying a fixed income asset such as treasury bills, municipal bonds and other fixed income instruments. These instruments offer lower returns compared to stock investments. The interest rate on fixed income instruments are generally lower than those of stock and they are not easily convertible.
Real Estate. Real estate investing involves buying real estate such as homes, commercial properties, land, etc. and is the most common category of investment.
Equity. Equity investing is considered an ideal option for new investors as it provides long-term returns as well as security for the existing investors. Equity investor often invest in the stocks of a company.
Cash. Cash investing refers to investing in securities that do not require the ownership of the property to sell them. These are considered to be the safest form of investing. Cash investment is considered as the most popular form of investment.
There are many categories of investment that involve different categories of risks. However, it is important to note that investment does not always mean risk. loss. For example, when an investor invests in stock he does not necessarily need to give up all the benefits.