Meny Types of INVESTMENTS What are the Best for you
Do you know what types of investments there are? Are you thinking of investing? Do you want to diversify your portfolio with other types of investments? Whether you are starting in the world of investments or if you already have some experience, it is always a good idea to stay informed and looking for new options that help you get the most out of your money. That is why it is important that you learn what are the different types of investments that you can include in your portfolio. This knowledge will give you the tools to diversify and reduce the risk of your portfolio and consequently increase your wealth. Although it may seem a bit intimidating, it is up to you to decide what types of investments to include in your portfolio.But the good news is that there are a wide variety of options at your disposal so you should be able to find one that meets your investing profile. As you will see in this article there are many types of investments, possibly more than you thought. That is why I have decided to classify them into 4 different groups to make them easier to understand. These are the investment groups that you will find in this article:
- Investments in which you own an asset
- Investments in which you lend your money
- Investment funds
- Alternative investments
I hope that after reading this article, investments do not intimidate you so much and you have a clearer idea of what options are available to you to grow your money. List of Contents Investments in which you own an asset
This is possibly one of the most popular types of investments. This category consists of assets that you can purchase with the expectation that they will go up in value. The fact of owning these assets gives you certain rights such as to collect cash flows as dividends, if any.
This class of investments includes assets such as:
1. Actions :
Without a doubt the best known investment of all. A stock is a certificate that says you own a piece of a company. When you acquire a share, you will have certain rights such as to decide on some matters related to the company or to receive a part of the profits.
The total value of the company in which you invest will be determined by the price of its shares in the stock market. If there are many investors who want to buy the shares of the same company, they will increase in value.
There are many factors that affect the price of stocks . Among them are the news, the publication of the annual accounts, the economy or even the changes in the top management.
2. Business :
Starting a business is one of the hardest forms of investment since it will not only require money but also time. Of course, it is one of the best ways to invest since its potential returns can be very high.
If you create a product or service that is capable of solving a specific problem, then you will not have any difficulty in finding consumers who want to buy it.
If you are thinking of starting your own business but don’t want to risk leaving your current job yet, you may want to read this article on side hustles .
3. Real estate:
This category is a good investment for the long term. In it we find many different types of assets such as apartments, houses, offices, land, storage rooms, garages and even farmland.
Returns from investing in real estate will be generated through rental income and increases in property value that may arise over the years.
Although your home may go up in value, it cannot be considered an investment property since you are going to use it to satisfy a basic need.
There are two main types of investments when it comes to investing in real estate. On the one hand you can buy a property, reform it and then sell it at a profit. On the other hand, you can use the classic buy and rent strategy.
If you keep the properties for a long time while you are paying the mortgages and adjusting the rents over the years, you will end up having a good equity capable of generating generous income.
Of course, keep in mind that real estate is quite illiquid so you may have problems if you want to access your money quickly. Another downside is that they can be difficult to manage if you decide to do it yourself.
It consists of investing in a company or project that is starting. For this, entrepreneurs present their business idea, usually through the internet, and receive small contributions of money from many small investors. In exchange for their contributions, investors receive shares in the company.