Investment is a process of allocating your finances into a product to gain profit and good returns. There are various types of financial products that are useful to reach your financial goals. From banking bonds to stock market share, every product possesses different characteristics. If you are an MBA scholar, business studies concepts might be a daunting task for you to understand. Read this blog, highlighting several investment products compiled in the business solutions manual.
Different Types of Investment
Once you have a thorough knowledge of investment products, begin it with piecing together a mix that fits your financial portfolio.
1. Company shares
Shares are the units in the form of a financial asset of any company, mutual funds, real estate funds, etc. If you own shares, you will be called a shareholder. Shares help you expressing the ownership relationship between the company and the shareholder. It also represents equity stock in a firm, with the two main types of shares being common shares and preferred shares. Although the one and only limitation of this investment product are volatile prices, which fluctuate everyday. Those who are comfortable with ups and down may opt for this investment product. Get more knowledge about stock shares in the 8th edition of the investments solutions manual by Bodie.
2. Real Estate
Out of the basic need for food, cloth, and shelter, shelter is also a type of investment that rises substantially over a long period. However, if you are looking for a shorter term, it's better to invest in another portfolio rather than in real estate. Like stock market shares, the price of real estate property also fluctuates along with time. If you don't want to invest directly in real estate, choose indirect means by investing in a property investment fund.
3. Fixed interest
Fixed interest investment bonds are well known, which occur when governments or companies borrow from investors and pay interest rates instead. They are also considered a defensive investment as they are offering lower potential returns and levels of loss than stocks or other assets. However, it is important to note that they can be sold as quickly as cash without the risk of capital losses.
4. Cash
Investment in cash includes daily bank accounts, savings accounts, and fixed deposits offering high interest rates. All types of investments usually have the lowest return possible. Although they offer no opportunity for capital growth, they can provide a normal income and play an important role in protecting funds and reducing the investment portfolio losses.
5. Provident Funds
Any employee's retirement plan investing in a provident fund helps build a corpus for your future. It is one of the popular retirement funds; employee invests in. An employee contributes it during the time he or she works in any organization and an equal contribution from the employer. While the time of savings, these retirement funds can be withdrawn and can be used later.