The economy is on the upswing and with more money going into your savings, you might be thinking about investing for the first time. Of course, everyone needs to start somewhere. For beginner investors, you may want to learn about investments that will grow your money over the course of the next year or several years. Here are some the main types of investments that new investors should consider delving into.
Most commonly, people think of buying stock in companies when you talk about investing. Interestingly, there are a lot of different types of investments within stocks. You can buy and sell stocks, including common or preferred stock. These will make you a shareholder of a company and the value will change according to the performance of the company. If you are new to investing, you need to research they types of stocks to invest in. These types of investments may seem simple to buy and invest. However, there are many complexities to investing in company stocks.
Another secure investment, government bonds pay a return after a determined period of time. These bonds will earn your money interest which you can access after the bond maturity date. There are many types of investments in government bonds, including agency, municipal or treasury. If you would like to have a fixed return on your principal at a set duration, then bonds are some of the securest investment types.
By contrast, beginners can invest their money into private businesses. This can carry more risk compared to the other types of investments. However, there are many ways to invest in companies operating in growing industries. You can buy equity, offer a loan or invest in the company assets. When buying into a business partnership or corporation, ensure that you have some terms and conditions that protect your investment from getting wiped out. While business investments can require learning more, the payoff can be worthwhile if you are willing to do the work to make it successful.
Next, real estate investments are some of the most traditional types of investments. You can simply invest in cities like Colorado by purchasing land, property, houses or buildings. Alternatively, you can invest in REITs, which stand for Real Estate Investment Trusts. These trusts will invest in real estate properties on your behalf. They typically offer higher returns because they can combine your money with other investors to take on larger projects. Either way, you can decide how much management and work you want to take on when investing in real estate. If bought correctly, real estate investments could earn a consistent return year to year.
Known as an alternative investment type, precious metals like gold can hold their value from year to year. As long as the value for gold rises, you will earn a return on your investment. Remember, gold is actually a commodity, so the prices could decrease in the future. There is a little more uncertainty when investing in gold. But, the uncertainty in stocks and traditional investments might push you to make an alternative type of investment.
You can invest your money in many different ways. For beginners, these are five types of investments that you can start considering now. There are many investors making money in trading online stocks, bonds, business, real estate and metals. Depending on your tolerance for risk, willingness to get involved and capital available, you should choose the best type of investment for you.