Various Types of Investments You Can Explore
posted on Monday, August 28, 2023 in Financial Tips
People would often think first about putting their money in a savings account to boost their finances. It’s a way to have funds whenever you need them, with a low risk of losing value. However, if you want higher returns and an opportunity for your money to grow, investments are the way to go. Investing is for big long-term goals, such as a down payment for a house or your child’s college tuition.
You can put your money into various types of investments, each of which has its benefits. Since investing involves taking on some risks, selecting the one that aligns the most with your goals is crucial. With that said, here are some of the more common investment types to choose from:
Commonly known as equities, stocks signify partial ownership of a publicly traded company. Whenever you put your money on a company’s stock, you purchase a tiny share of it. The more shares you buy, the larger your claim on the business. Companies would issue stocks to raise money, and investors would trade them based on their growth potential.
On the other hand, you can also buy bonds from a corporation or the government. Bonds are essentially loans these entities get from you to fund their projects. They will then pay you the interest on the loan for a set period. Once the time frame has passed, they will pay you back the full amount. The duration for bonds can range from a few days to decades.
Another great long-term investment you can try is a mutual fund. It's a pool of money from shareholders managed by a firm. The fund's assets are then allocated to various investment types. This method makes it easy to get into numerous ventures without dedicating to just one. Investors receive a proportional income according to their shares, and the risk and return are shared.
Certificate of Deposit
Often considered as a low-risk investment, a certificate of deposit (CD) is a savings account that can earn you interest for a fixed period. Once that time is up, you get your principal investment back. CDs have a higher interest rate than a regular savings account, and the money must remain untouched until the time is over. Compared to other types, this is a more conservative investment.
These examples are just some common investment types that people can explore. With so many options to choose from, it can get quite daunting for new investors. That’s why Community 1st Credit Union is here for you. Talk to one of our C1st representatives today to know which fits your goals best.