The type of investment that is right for you will depend on your financial goals, risk tolerance, and investment time horizon.
There are different types of investments, including:
- Stocks: Stocks are ownership shares in a company. When you buy stock in a company, you become a part-owner of that company and are entitled to a share of its profits. The value of a stock can rise or fall depending on the performance of the company.
- Bonds: Bonds are a type of debt investment. When you buy a bond, you are lending money to a government or corporation. In return, the issuer of the bond promises to pay you a fixed rate of interest over a specific period of time, and to repay the principal amount of the loan when the bond matures.
- Mutual funds: Mutual funds are a type of investment that pools money from many investors and uses it to buy a diversified portfolio of stocks, bonds, and other securities. Mutual funds are managed by professional money managers, who aim to generate returns for the investors in the fund.
- Alternative investments: Alternative investments or "alts" are investments in assets that are not traditional securities, such as stocks or bonds. These types of investments can include things like real estate, commodities, collectibles, and private equity, including venture capital.