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Know Your Investments

There are quite a few different types of investments. Essentially, an investment can be described as something that has value and can be bought either for income or capital appreciation. Typically, when someone makes an investment in something, they hope to be able to make more money with that particular investment in the future.

Cryptocurrencies

Right now, the most popular type of digital currency is Bitcoin. Bitcoin has the largest part of the emerging market when it comes to cryptocurrencies. It is trading at a larger volume than most of the other types and the value of it is much higher than the second one in line – Ethereum. Because bitcoin mining has been widely adopted and more mainstream, it has risen from a great experiment to an asset.

Aside from all of that, the progenitor of what is known as blockchain tech has had growth at an exponential rate and this is a good thing for the technology and cryptocurrencies, Even though there were a couple of instances of theft, both for Ethereum and Bitcoin, the trust in these types of currencies is still growing. Some people tend to think that the cryptocurrency will burst, but economic and political conditions that are contentious might just push the price even higher.

Stocks

Stocks are a type of investment that has shown some of the most optimal opportunities for growth over time. That being said, investing in stocks can be rather risky. Stocks are typically categorized as either domestic or international. Investing in stocks can be described easily by saying someone bought so many shares of a company.

Cash

Investments in cash are symbolized by short term types of instruments. If you are looking for protection and strength in your investments, these offer both of them. However, investments in cash don’t offer a lot of room for growth, but they are also not associated with as much risk. Some examples of investing in cash might be CDs, money market funds, and bank accounts.

Bonds

Bonds actually represent a loan to either the government or a corporation. They are meant to offer a consistent, steady source of fixed income. Investments in bonds rank somewhere in between stock and cash investments when it comes to the risk involved. The level of risk associated with bonds is moderate. Bonds established by companies are known as commercial bonds and it is easy to invest in this type of bonds when you have your money pooled with other peoples.

Mutual Funds

Mutual funds are great to invest in when you are trying to diversify your portfolio. This is because they tend to be a collection of both bonds and stocks. When you wish to invest in a mutual fund, the easiest way is to combine your money with money from others looking to invest. This makes it possible to pay a professional so that they can choose specific investments to fit the needs of the investors. Mutual funds tend to be organized with specific strategies in place and are able to be focused on different things, such as small stocks, large stocks, industry stocks, or even government bonds.

ETFs

Exchange Traded Funds or ETFs resemble mutual funds in many ways, but they tend to be traded right on the stock exchange floor throughout the day just as shares of stock are. Mutual funds tend to be valued when the trading day is over, but ETFs get valued constantly throughout the entire time the stock markets are open. Many of them track the more passive market indexes such as the Russell 2000 index, Barclay’s Aggregate Bond Index, and the S&P 500 and many others. Recently, ETFs that are actively managed have come into their own and now they have what is known as smart beta ETFs. These create indexes that are based on a variety of factors including momentum, low volatility, and quality.

Real Estate

Investments in real estate can be made easily by simply purchasing a residential or commercial property. There are also REITs (Real Estate Investment Trusts) that pool money from a number of investors and buy properties with it. There are even some ETFs and mutual funds that invest in a variety of REITs.

   
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