Investing Basics – Investing in Mutual Funds

Investing

Investing Basics – Investing in Mutual Funds

Investing is a term that is loosely used for several financial activities. It is also used as a way to describe investment strategies and expectations. To simply invest is to put money into an investment with the hope of seeing a return/profit in the near future. Simply put, to invest simply means that you are buying an asset or an object with the hope of making a profit from the sale or the return of your initial investment that is an increase in your asset’s value over a given period of time. The most common examples of these assets are stocks, bonds, mutual funds, real estate property and securities such as futures.

There are several different types of investing. Some popular types of investing include: Purchasing and Holding, Holdbacks, Bond Growth, Dollar Cost Averaging, Over Equity, Discretionary Investing, Income Investing and Interest Rate Arrangements. Within these categories there are many subtypes such as: Cost Based, Time Weighted, Stable Income and Volatility. All of these types of investing can be used successfully and they all have their own advantages and disadvantages depending on the type of return expected as well as the type of risk/reward applied to the investment.

Investing can also involve the purchase of stocks and bonds. Some of the most common types of stocks and bonds are: Common Stock, Preferred Stock, Debt Invested, Equity Investments, Growth and Bond Investing. Many of these categories of stocks and bonds are there for specific reasons such as the increase in the price of stocks and bonds, increases in dividends, company growth, company development or market growth, price appreciation, and market penetration. As with any investment, when investing it is important to do your homework and research the company to ensure its long term viability and growth prospects. Additionally, when buying stocks and bonds it is important to consider any legal agreements regarding ownership structure, dividends, redemption rights, or other terms related to investment. Remember that the real estate market, while a safe haven for some, is also a great place to invest since it is one of the few markets that has consistently and significantly increasing returns.