There are only three main categories of investment but each one has many subcategories. The three main categories are stocks, bonds and cash but many people are overwhelmed when they start looking to invest because it can become very complicated. Figuring out your investment style will help narrow the choices and make it easier to decide where to put your money.
There is a lot to learn about each type of investment but knowing how much you can risk and dangers associated with each one will guide you towards your investment style. Just as there are three main categories of investments there are also three categories of investor styles. The three investment styles are conservative, moderate, and aggressive. There are also two levels of risk tolerance, high risk and low risk.
If you are totally new to investing in the stock market you do not have to worry about learning everything. Figure out what your investment style is and learn about those investments that are available to you. You do not need to know the market inside out that is what stock brokers and practice accounts are for. But, you do need to know enough so that you have a basic understanding of how it works and you don’t feel taken advantage of.
What is your investment style?
The conservative investor is usually a low risk taker. This type of investor will invest in stocks that grow slowly over a long period of time. The attractive investment opportunities for this investment style is usually a traditional savings account at the local bank, US savings bonds, money market accounts, mutual funds or CD’s. This investment style is a safe one but has a very low interest rate and takes time to accumulate any profit but, are very safe low risk investments.
The moderate investor has some money in low risk investments but is willing to take a bit of a risk with the hope of making a quick profit. It may be that this type of investor has set aside funds for experimenting or he is willing to risk some money on a hunch. Real estate is also an area this type of investor may explore.
The aggressive investor is not afraid to take chances but is very confident and usually successful.
Any of these investment styles can be a single investor or a group of people making decisions about how to grow one single funding source.
Decide how much risk you are willing to take with your money and find your investment style. Compare interest rates on your investment choices and get started today.