The term “investment” is somewhat muddled up nowadays with its overuse. Nowadays, everything that you do to save a little cash is called investment, which is actually not. Instead the connotation of investment has come off a long way and beyond the stocks, bonds and fixed deposits, people nowadays invest in the health, house and education as well.
So, let’s take a look, how the concept of investment has evolved so much and accordingly we will be talking about three basic types of investments that actually matter to build your profit.
This is the first and foremost thing that crosses our mind especially when the topic. In spite of being relatively volatile, ownership investments are classed as one of the profitable types of investment. The following are examples of ownership investments:
- Stocks: Holding stocks refers to holding shares of the company. Precisely, the traded securities ranging from futures to currency swaps, everything falls under the category of stock investment. So, when you are buying or investing in the stocks, you have all the right to take any action on its basis.
- Business: It is one of the
most difficult formof investment plan,because it demands more than just financial investments. It’s indeed an ownership investment with extremely large returns.
- Real Estate: Any dwellings, be it a new house or a resell one are called investments. If the house you are dwelling in serve your basic needs, it’s definitely an investment which will appreciate in the longer years. Whether you sell it or take it up for mortgage, real estate property will definitely give you returns.
- Precious Objects: Antiques, gold jewellery, precious stones or metals, whether you own it or resell it, it will give you good returns on investment.
This is a business which is basically an investment. It’s like you work as a bank. It lowers the risk of investment and also lessen the returns. It reduces the risk of ownership investments and there are two types of investment plans in this scheme.
- Bond: Bonds usually pay a predetermined amount after a certain period of time. From Treasuries to International Debt Issues to corporate junk bonds and credit default swaps (CDS)everything falls under the category of bonds.On the other hand, in the same period the stock of a company can double or triple in value, which pays of more than the bonds.
- Savings Account: The savings account performs same like the bonds. You are essentially lending money to the banks, which will be used by the banks for their business transactions. The return is significantly lower than any other investment options, yet the guarantee is available.
If not in the form of liquid cash, these are as good as cash investment. These are popular type of investments that basically operate in the form of money market funds. Though it has lost popularity in the recent times, it’s quite popular as one of the dependable types of investment, since it offers guaranteed returns.. Money market funds are also more liquid than other investments.