Various Investment Options

As an investor it is very important that you understand the various types of investment options available to you. So, before you invest your hard earned money, make sure that you carefully consider each investment option carefully, weigh its pros and cons and then choose an investment option that suits your needs.

VARIOUS INVESTMENT OPTION

  • Bonds = Bonds is a certificate of debt which is usually interest-bearing or discounted, that is issued by a government or corporation in order to raise money; the issuer is required to pay a fixed sum annually until maturity and then a fixed sum to repay the principal.
  • Stocks = Stocks is the capital raised by a corporation through the issue of shares entitling holders to an ownership interest or equity.
  • Options = Options is a ‘Derivative’. It is a financial derivative that represents a contract sold by one party or option writer to another party or option holder. In such a contract, the buyer has the right but is not obligated to buy (call) or sell (put) a security or other financial asset at an agreed-upon price which is known as the strike price.
  • Commodities = Commodities are a raw material or product that is bought and sold commercially in large quantities as an investment. These investments don’t pay interest or dividends, but do increase and decrease in value which can result in a capital gain. It has been found that the value of commodities often moves in the opposite direction of other asset classes such as shares.
  • Derivatives = Derivatives is a financial instrument whose value is based on another security.
  • Term Deposits = Term deposits are when an investor agrees to lend his money to the bank for a fixed period of time such as 6 or 12 months in return for a higher rate of interest.
  • Bank Savings = Bank Savings accounts are one of the most common and least risky ways to save your money for the short term. An investor saves money in a savings account which in a way is lending it to the bank, which pays the account holder some interest in return.
  • Real Estate = Another investment option is that of buying real estate such as property consisting of houses and land. It is a good investment option for those who have large sums of money to be invested.
  • Futures = Futures are bulk commodities bought or sold at an agreed price for delivery at a specified future date through a financial contract. The contract obligates the buyer to purchase an asset or the seller to sell an asset, such as a physical commodity or a financial instrument, at a predetermined future date and price.
  • Forex = FOREX stands for ‘Foreign Exchange’. Hence, FOREX is the market in which currencies are traded. This market is the largest and also the most liquid market in the world as it includes all the currencies in the world.
  • Gold = Gold is a commodity and of all the precious metals, it is the most popular as an investment. You can use gold to invest in it and protect yourself against economic, political, or currency crises.
  • Mutual Funds = Mutual Fund is a collection of stocks and bonds which is bought by the pooled money that is invested in assets. So, while buying a mutual fund, your money is pooled with a number of other investors by a mutual fund company.
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