There are generally three basic types of investments. They are: ownership LBLV Broker investments, lending investments, and cash equivalent. In this article, we will define each one of them. Check them out!
Ownership Investment
Ownership investments are most commonly what one thinks about when he or she hears the word “investment”. These are investments with the highest level of volatility but also with the highest potential of profits.
Stocks
A stock is practically a certificate that gives you the right to a portion of a company. More generally, all kinds of LBLV Trading Platform traded securities, from derivatives to currency swaps, are kinds of ownership investments, even if all you may have is a contract.
When you buy one of these certificates, you automatically have ownership claim on a portion of a company’s value. When it comes to futures contracts, you are given the right to carry out certain actions.
Business
The money that you spend to start and run a business is a form of investment. Entrepreneurship is one of the most difficult investments to make since it requires more than just money. However, with that difficulty comes the potential for huge returns.
Real Estate
Houses, apartments, and other types of such properties that you buy or rent, repair, or resell are investments. On the other hand, the house where you live is different since it is simply filling a basic need. You get the house to be your shelter, but you seldom expect to get some profits when you purchase it.
Precious Objects
Gold, silver, and other collectible materials can all fall under the ownership type of investment, as long as these objects are bought with the intention of reselling them for a profit.
These are investments, but there are some reasons why they are not necessarily a good investment. For one, there is always a risk of physical depreciation (damage) and they may require some upkeep and storage cost that eat away from eventual profits.
Lending Type of Investments
Lending investments enable you to serve like a bank. These investments tend to have lower overall risks when compared to ownership investments, but they also have lower returns.
A bond that is issued by a company will pay a certain amount over a certain period, while in the same period the stock of a company can double or triple in value. It can also lose heavily and eventually go bankrupt, in which case bondholders still receive their money and stockholders usually receive nothing.
Another form of lending investment is your savings account. Even if you have nothing but a regular savings account, you are still investing. You are basically lending money to the bank, which it will dole out in different forms of loans.
Cash Equivalents
Cash equivalents are investments that are “as good as cash” and this is because they are very easy to convert back into cash.
Money Market Parts
Money market funds have very small returns but the risks are also very small. Money market funds are also more liquid than other types of investments. That means you can actually write checks out of money market accounts, similar to what you would do with a checking account.
