Types of Investments: Where you can Invest your money in

Previously we had discussed briefly the concept of investment. Now let us have a look at option of investment where we can roll our money in. Your choice of investment greatly depends on the amount of cash on hand.

1. Cash Investements
Cash Investment includes saving bank accounts, certificates of deposits and life insurance policies. Investors can benefit from the lower risk and high liquidity of cash flow in such investments. It generally regarded as one of the safer ways you can invest your cash. However,cash investments provide low interest rate and a risky option during inflation.

2. Bonds
A bond is a formal contract to repay borrowed money with interest at fixed intervals. It is like a loan: the issuer is the borrower (debtor), the holder is the lender (creditor), and the coupon is the interest. Bonds provide the borrower with external funds to finance long-term investments, or, in the case of government bonds, to finance current expenditure. Investing in bonds consider safer than stocks, but still it has some level of risks due to fluctuation of interest rate, inflation risks, rating downgrades, and Liquidity risks.

3. Stocks

Put your money in stock market is considered as a risky move. However, the higher the risks the larger the profits. Unless you have blue chips shares on your hand, enjoy the interests every financial season, you won't be able to avoid any of the ups and downs in share market. Smart people do analysis before invest their money on certain companies, and ordinary people just follow what they heard from "intellectual" "professional" or read from the paper.

Ignorance is the taboo of investment.