Types of Investments

<p> <strong>Cash or cash equivalent:</strong> cash can be easily accessed as can a cash equivalent investment. Term Deposits are available that can be cashed out at anytime. They however will not have a high interest rate attached to them. The shorter the period we leave them in the system the less interest they gather. Term Deposits: these are the same as the cash equivalent versions except that they are at a higher interest rate and must be invested for a longer period of time.</p> <p> <strong>Term Deposits:&nbsp;</strong>these are the same as the cash equivalent versions except that they are at a higher interest rate and must be invested for a longer period of time. Term Deposits are usually in the form of a bond or GIC (guaranteed investment certificate). Bonds are sold by the governments and companies of the world. Government bonds have the lowest interest rates but are the least risky. Company bonds will have higher interest rates depending on how stable or successful the company is. Company bonds will be rated by their risk factor.</p> <p> <strong>Stocks (Equities):</strong> these are the riskiest types of investments but they also provide the most chance for great profits. These are very hard to figure out no matter what. The stock values of even the most successful companies can go down. While some people trade stocks on a short term basis, it is not for the average person. The average person should look at stocks on a longer timeframe. That timeframe however is much shorter than it used to be before computers created a new faster way to look at and trade stocks. Trying to figure out the various types of investments can be rather confusing. Check out some of the following links to get more information.</p> <p> <em><strong>links: need to find some of these</strong></em></p> <p> Many professionals will say you can buy the stock of a large important company, just hold onto it for a long, long time and it will be very valuable in the future. While that may be true to a degree, the fact is some companies falter and the stock value goes down. Some stocks will go up for a long time but then go down quickly. Making a profit or a loss depends on the value of the stock when it is sold. On average a basket of good bluechip type stocks (like those that make up the Dow Jones Average of the New York Stock Exchange) will average approximately 7-8% over a long period of time. A long period of time would have to be well over 10 years, more like 15-20-25 years. This is the best standard investment that can be made as it is the most successful. Other investments might advertise to give that much but they could falter and fail to pay out or even go bust.</p> <p> <strong>Bundled Term Investments and Stocks</strong></p> <p> Each of the previous investments can be bundled into other investments as well. They are then commonly called a basket of investments.</p> <p> <strong>Stock Baskets:</strong> ETFs and Mutual Funds are baskets of stocks and/or other investments mixed in depending on the purpose of the ETF or Mutual Fund. To make it easier for people to know what is in the ETF or Fund they usually conform to a category of stocks (eg - financial, technology, utilities or mining companies). These bundles are much safer than buying individual stocks. It is near impossible for all of the stocks to go down in value all at once therefore the funds value will remain rather stable. Of course it will not go up really fast as well. For the average investor a more stable value is easier to live with.</p> <p> <strong>Fixed Income Investments are:</strong> investments that are created to provide a fixed investment return on the investment. This then means there will be a certain amount of funds paid back to the client at predetermined times. These are usually very safe investments so that there will always be funds available to pay out at the predetermined times.</p> <p> There is a profusion of other terms regarding investments but the average person will not likely become involved in them. They are generally used by experts for people with larger portfolios or individuals that really know there investing. It is doubtful that there will ever be a need to get into these investments.</p> <p> see more: &nbsp;I would like these to be hidden for now to tease people a bit - how do I do that???</p> <p> <strong>ETFs</strong> are 'Electronically Traded Funds'. These funds are a basket of investments (usually stocks but could have some bonds) and are electronically traded. That means that they are traded by a computer program. They are not actively watched but simply bought according to a computer program. It is easier to do this then to try and buy the stocks and get the proper mix. Doing it electronically saves a lot of money therefore ETFs generally cost less to have then mutual funds. They are bought and sold like stocks and are taxed liked stocks.</p> <p> <strong>Mutual Funds</strong> are a basket of stocks or bonds or whatever investment lends itself to the fund. The fund is usually a basket of like-minded entities. That way the investor will have a really good idea what the investment is about. That way the risks are usually easier to understand. Mutual Funds are not electronically bought and sold. They are bought and sold manually and take more effort to manage. Being bought and sold manually, they can be manipulated by the manager a bit more. This method however takes more effort therefore the management fee is generally much more expensive than an ETF. Any profits will be taxed similarly to a stock although being a mix of items there may be some different tax implications.</p> <p> <em><strong>links: need some here</strong></em></p> <h2> Investments for Special Purposes</h2> <p> There are special investment packages for specialty savings. These are plans for such specialties as retirement, home buying, further education and a few others. Each country has their own set of these specialty savings plans. The reason they are special is usually because they have special tax savings. Each type of plan has its own rules and regulations as well as different tax savings. These Specialty Investments can be made up of a variety of investment items such as stocks, term deposits or cash. As an example, Canada has tax breaks for Retirement Plans (RRSPs), for Education Planning (RESPs) and Disabilities (RDSPs).</p>

<p> <strong>Cash or cash equivalent:</strong> cash can be easily accessed as can a cash equivalent investment. Term Deposits are available that can be cashed out at anytime. They however will not have a high interest rate attached to them. The shorter the period we leave them in the system the less interest they gather. Term Deposits: these are the same as the cash equivalent versions except that they are at a higher interest rate and must be invested for a longer period of time.</p> <p> <strong>Term Deposits: </strong>these are the same as the cash equivalent versions except that they are at a higher interest rate and must be invested for a longer period of time. Term Deposits are usually in the form of a bond or GIC (guaranteed investment certificate). Bonds are sold by the governments and companies of the world. Government bonds have the lowest interest rates but are the least risky. Company bonds will have higher interest rates depending on how stable or successful the company is. Company bonds will be rated by their risk factor.</p> <p> <strong>Stocks (Equities):</strong> these are the riskiest types of investments but they also provide the most chance for great profits. These are very hard to figure out no matter what. The stock values of even the most successful companies can go down. While some people trade stocks on a short term basis, it is not for the average person. The average person should look at stocks on a longer timeframe. That timeframe however is much shorter than it used to be before computers created a new faster way to look at and trade stocks. Trying to figure out the various types of investments can be rather confusing. Check out some of the following links to get more information.</p> <p> <em><strong>links: need to find some of these</strong></em></p> <p> Many professionals will say you can buy the stock of a large important company, just hold onto it for a long, long time and it will be very valuable in the future. While that may be true to a degree, the fact is some companies falter and the stock value goes down. Some stocks will go up for a long time but then go down quickly. Making a profit or a loss depends on the value of the stock when it is sold. On average a basket of good bluechip type stocks (like those that make up the Dow Jones Average of the New York Stock Exchange) will average approximately 7-8% over a long period of time. A long period of time would have to be well over 10 years, more like 15-20-25 years. This is the best standard investment that can be made as it is the most successful. Other investments might advertise to give that much but they could falter and fail to pay out or even go bust.</p> <p> <strong>Bundled Term Investments and Stocks</strong></p> <p> Each of the previous investments can be bundled into other investments as well. They are then commonly called a basket of investments.</p> <p> <strong>Stock Baskets:</strong> ETFs and Mutual Funds are baskets of stocks and/or other investments mixed in depending on the purpose of the ETF or Mutual Fund. To make it easier for people to know what is in the ETF or Fund they usually conform to a category of stocks (eg - financial, technology, utilities or mining companies). These bundles are much safer than buying individual stocks. It is near impossible for all of the stocks to go down in value all at once therefore the funds value will remain rather stable. Of course it will not go up really fast as well. For the average investor a more stable value is easier to live with.</p> <p> <strong>Fixed Income Investments are:</strong> investments that are created to provide a fixed investment return on the investment. This then means there will be a certain amount of funds paid back to the client at predetermined times. These are usually very safe investments so that there will always be funds available to pay out at the predetermined times.</p> <p> There is a profusion of other terms regarding investments but the average person will not likely become involved in them. They are generally used by experts for people with larger portfolios or individuals that really know there investing. It is doubtful that there will ever be a need to get into these investments.</p> <p> see more:  I would like these to be hidden for now to tease people a bit - how do I do that???</p> <p> <strong>ETFs</strong> are 'Electronically Traded Funds'. These funds are a basket of investments (usually stocks but could have some bonds) and are electronically traded. That means that they are traded by a computer program. They are not actively watched but simply bought according to a computer program. It is easier to do this then to try and buy the stocks and get the proper mix. Doing it electronically saves a lot of money therefore ETFs generally cost less to have then mutual funds. They are bought and sold like stocks and are taxed liked stocks.</p> <p> <strong>Mutual Funds</strong> are a basket of stocks or bonds or whatever investment lends itself to the fund. The fund is usually a basket of like-minded entities. That way the investor will have a really good idea what the investment is about. That way the risks are usually easier to understand. Mutual Funds are not electronically bought and sold. They are bought and sold manually and take more effort to manage. Being bought and sold manually, they can be manipulated by the manager a bit more. This method however takes more effort therefore the management fee is generally much more expensive than an ETF. Any profits will be taxed similarly to a stock although being a mix of items there may be some different tax implications.</p> <p> <em><strong>links: need some here</strong></em></p> <h2> Investments for Special Purposes</h2> <p> There are special investment packages for specialty savings. These are plans for such specialties as retirement, home buying, further education and a few others. Each country has their own set of these specialty savings plans. The reason they are special is usually because they have special tax savings. Each type of plan has its own rules and regulations as well as different tax savings. These Specialty Investments can be made up of a variety of investment items such as stocks, term deposits or cash. As an example, Canada has tax breaks for Retirement Plans (RRSPs), for Education Planning (RESPs) and Disabilities (RDSPs).</p>