Different types of investment

In a quick overview the three various types of investments to be mentioned are stocks, bonds, and cash. Now this may sound simple but unscrupulously the complicated journey begins from here because each type of investment has numerous sub-divisions of investments falling under it.

To avoid the overwhelming big world of stock market as a investment investing newbie,before hitting accelerator you must be familiar with learning about each different investment type. Fortunately, the amount of information that you need to learn has a direct relation to the type of investor that you are. So, on reference to types of investment and knowledge the path again leads to three types of investors: conservative, moderate, and aggressive. Similarly the classification of the levels of risk tolerance can be done high risk and low risk catered by the various types of investment.

Conservative investors by name suggests that they are the low risk takers which further mean that they involve in activity based in hard cash like putting own money in interest bearing savings accounts, money market accounts, mutual funds, US Treasury bills, and Certificates of Deposit and these all refers to the classification of satisfactorily safe investments that augment over a long period of time. Moderate investors are the moderate risk and low risk takers who involve themselves in bonds, dabbling in the stock market,even in low risky real estate besides cash stuff.
Higher risk takers or aggressive investors usually entangle themselves in stock market and beyond this they also tend to be active in investing in business ventures as well as higher risk real estate. For deeper illustration for instance we can assume a personnel that buy old apartment or building and then plan and renovate the property in the business hope of reselling in more worthy price or just keeping them for high rental purpose. In some cases, this simply works out just fine while all other may not be success story so it can be solely taken as a risk.

Take a glance before investment investing, it is of immense importance to learn and gain knowledge about the different types of investments, and what those investments can do for you. You must necessarily understand the risks involved, and pay attention to past trends as well. History repetition can indeed be possible and this need to be known by the investors at a first quick glance.
Different types of stock
The different types of stock are what confuse most first time investors. That confusion causes people to turn away from the stock market altogether, or to make unwise investments. If you are going to play the stock market, you must know what types of stock are available and what it all means!

Common Stock is a usual general term that you may have been hearing quite often.Common stock is famous because literally anybody is eligible to buy common stock, regardless of age, income, age, or financial standing. Publicly also spoken as shares it is essentially part ownership in the business you are investing in. Your purchased common stock rises in value only and if the company boosts up and earns money and also falling of your stock value occurs if the gross profit of company descends and bankruptcy incurs. Common stock holders are not the activists of the daily business operations of company whilst they only hold the power of electing the board of directors of the invested company.

Again if we on further ongoing there are are also various classes of stock associated with common stock namely Class A and Class B. The first class, class A, essentially gives the stock owner more votes per share of stock than the owners of class B stock. The trend of different classes of stock creation in a corporation has been into existence since 1987. The different classes bearing stocks are generally omitted by many investors and stocks that have more than one class are not called common stock.

The most ritzy and smart type of stock is of course Preferred Stock. Preferred stock isn’t a stock as a whole entity. It is a mix of a stock and a bond. While you as a preferred stock holder can strongly claim to the assets of the company in the case of bankruptcy and also you can get the first priority on profit proceeding from a company before the common stock owners there is still a downside that if you're making up mind on preferring this preferred stock, be cautious that the company typically has the right to buy the stock back from the stock owner and dividend payment can eventually stop to be in your pocket,see in the terms and conditions.
Different types of bond
While investment investing in bonds is good and of low risk;there are four basic types of bonds available and they are sold through the Government, through corporations, state and local governments, and foreign governments.

One of the delighting fact of the bonds is that you do not loose your money;in fact you will get the investment money back so the bond investing makes it perfect place for those who are new to investing, or for those who have a low risk tolerance.The Treasury Department of the United States government do the job of selling treasury bonds and the purchased Treasury Bonds vary themselves from maturity dates having a range from three full months to thirty years.

Treasury bonds is different because it is backed up by the US government and this include Treasury Notes (T-Notes), Treasury Bills (T-Bills), and Treasury Bonds and the interest you have to pay only implies on the interest that the bonds earn.

Public securities markets sell Corporate bonds where a corporate bond is essentially a company selling its debt. These bonds usually have high interest rates, but they are a bit risky in the sense that if the company goes whirling down , the bond would be of zero use.

State and local Governments are also active in selling bonds but these bonds differ from the bonds issued by the federal government in a point that these bonds usually have higher interest rates. The clear scenario is that State and Local Governments can go bankrupt indeed while this is unlikely in case of the federal government.

The unprecedented merit of State and Local Government bonds is that they're free from income taxes – even on the interest whilst State and local taxes may also be waived. Tax-free Municipal Bonds is one of the common example of State and Local Government Bonds.

Mutual fund involves purchasing of foreign bonds which is actually very difficult and often very risky to invest in foreign countries. The safest type of bond to buy is one that is issued by the US Government.

Although the interest rate in bonds which you'll get is comparatively lower the fact of little or no risk involved will surely compensates your mind. To see the best results it is advised to reinvest into another bond when initial bond maturity takes place.