Broadly Investments can be categorized into three

- Stocks , Bonds & Cash Investment

Not that simple as it sounds. It gets complicated underneath. Each type of investments has various types of investments which fall under each of them.

Learning about various investments is a huge topic. I can write a couple of books about them. But here I give an overall picture of the various investment types & investors.

Stock market can be bit scary if you are not an investment savvy. Fortunately there is plenty of information available and financial planners and stock brokers are available at very competitive rates.

Like investment , there are three categories of investors -

Conservative - Who deals with low risk investment and the profit margin for them will be lower compared to the other two - They usually deal with Cash and invest their money in high interest bearing savings accounts, mutual funds, Money market accounts , Post office Savings etc. These are investment with the lowest risk but will take a long time for the money to grow.

Moderate - These are type of investors who invests in cash and bonds and they may even trade stocks in the stock market. They also invest in real estate provided the real estate market is stable and low risk in the area they are investing. They even do investment in social lending in companies like Zopa.

Aggressive - These are the investors who are mainly traders in the stock market which is a high risk business. They even invest in new business ventures and also in high risk real estate. For example if we take the example of real estate business - Aggressive investors might buy an old apartment invest money to renovate expecting to increase the value of the apartment and to give out for rent. This is considered as a high risk investment, but if it works will return a huge profit.

If you are planning on investing, do your homework and decide on which path you are going to take. And what type of investor are you planning to be - Conservative, Moderate or Aggressive ? You may move to different type of investor role in future. Watch out for trends. Understand the risks and balance out on the returns.

If you have done enough research, work hard and you are watchful, there is very less chance for failure.

Learn from the mistakes others have made . Sometimes they are not worth making.

Filed under: Finance, Investment, Stocks, Tips by admin