5 Most Common Investment Instruments
There are many different ways to invest in the stock market. However, most people think that security investment may actually be a long-term loss of investment
So before you invest a dollar in the stock market, it's best to know about various investment vehicles.
Government bonds, certificates of deposit and money market accounts
I classify all of these as a group because they are the least risky of all investments. Unfortunately, they are almost the worst performance investment. why? Because the return on investment of these three kinds of tools is lower than most other investment vehicles. In February 2006, a very good money market account or CD account may get 3.5% – 4.5% annual return on investment, which is almost higher than the annual inflation rate of about. 1.7%. But if you are primarily concerned with keeping your investment capital, the three traditions are doing well.
2. Corporate bonds
Corporate bonds can provide better returns than government bonds, but of course they have a little risk. For example, GE 14-year bonds currently offer a return rate of 5.65%. The risk here is that GM could become financially unstable and unable to repay the loans it represents. However, high-rated corporate bonds are usually a security investment.
3. Mutual Funds
Mutual funds, in my opinion, are the worst investments. Now, I know that some mutual funds have 30% to 40% returns each year, and some are even more. However, the costs involved are usually very high, while the MOST Mutual Fund actually executes WORSE, then the market index. In part due to management fees and restrictive transactions as stipulated in each mutual fund prospectus.
Mutual funds are not free to trade any stock at any time they choose. It must be relevant to their investment strategy, even if their strategy is doomed to lose money!
Ah, the stock. Now this is the place where fun begins. Stock trading is where you can start earning a consistent return of 20% – 100% or higher for a year. Sounds good … so what's the problem? Well, you can relax your capital more easily than the previous three methods, and it takes a more active role in your part to achieve these returns. If you are interested in more than 20% per year, I recommend checking out BreakingWallStreet.com and finding the best stock picking system for you.
The options are actually above and beyond the range considered by most investors. In fact, most stockbrokers and financial advisors have only one thing to do, and one thing to do with trading options: they are too risky. Yes, they are more risky than stocks and should not invest in discretionary money. However, the options can and give a 100% to 200% return over the course of the day. Again, using a carefully planned trading system, one can trade options with minimal risk of loss and huge upside potential.
Remember that I'm not a stockbroker or financial adviser, you should always consult a financial adviser before you invest in anything. You can lose all your money by investing in something you do not know. But knowing all the options is sensible, so you can decide the severity of your investment and be able to make the money you deserve