Want to Invest??? Some Options...

INVESTMENT - Different Colors Of Investment...

We've already mentioned that there are many ways to invest your money. Of course, to decide which investment vehicles are suitable for you, you need to know their characteristics and why they may be suitable for a particular investing objective.

Bonds :

Bonds Grouped under the general category called "fixed-income" securities, the term "bond" is commonly used to refer to any of these securities founded on debt. When you purchase a bond, you are lending out your money to a company or government. In return, they agree to give you interest on your money and eventually pay you back the amount you lent out.
The main attraction of bonds is their relative safety. If you are buying bonds from a stable government, your investment is virtually guaranteed (or "risk-free" in investing parlance). The safety and stability, however, come at a cost. Because there is little risk, there is little potential return. As a result, the rate of return on bonds is generally lower than other securities. The tutorial "Bond Basics" will give you more insight into these securities.

Stocks :

When you purchase stocks (or "equities" as your advisor might put it), you become a part owner of the business. This entitles you to vote at the shareholder's meeting and allows you to receive any profits that the company allocates to its owners--these profits are referred to as dividends.
While bonds provide a steady stream of income, stocks are volatile. That is, they fluctuate in value on a daily basis. When you buy a stock, you aren't guaranteed anything. Many stocks don't even pay dividends, making you any money only by increasing in value and going up in price--which might not happen.
Compared to bonds, stocks provide relatively high potential returns. Of course, there is a price for this potential: you must assume the risk of losing some or all of your investment. More information on this type of investment can be found in the tutorial "Stock Basics." After you have a grasp of what stocks are and how they function, you might want to read about how to choose them in "Guide to Stock Picking Strategies."

Mutual Funds:

A mutual fund is a collection of stocks and bonds. When you buy a mutual fund, you are pooling your money with a number of other investors, which in turn enables you (as part of a group) to pay a professional manager to select specific securities for you. Mutual funds are all set up with a specific strategy in mind, and their distinct focus can be nearly anything: large stocks, small stocks, bonds from governments, bonds from companies, stocks and bonds, stocks in certain industries, stocks in certain countries, and the list goes on.
The primary advantage of a mutual fund is that you can invest your money without needing the time or the experience in choosing investments. Theoretically, you should get a better return by giving your money to a professional than you would if you were to choose investments yourself. In reality, there are some aspects about mutual funds that you should be aware of before choosing them, but we won't discuss them here. You can, however, check out the "Mutual Fund Basics" tutorial if you'd like to explore the advantages and disadvantages of mutual funds.

Alternative Investments:

Options, Futures, FOREX, Gold, Real Estate, Etc.So, you now know about the two basic securities: equity and debt, better known as stocks and bonds. While many (if not most) investments fall into one of these two categories, there are numerous alternative vehicles, which represent the most complicated types of securities and investing strategies.
The good news is you probably don't need to worry about alternative investments at the start of your investing career. They are generally high-risk/high-reward securities that are much more speculative than plain old stocks and bonds. Yes, there is the opportunity for big profits, but they require some specialized knowledge. So if you don't know what you are doing, you could get yourself into a lot of trouble. Experts and professionals generally agree that new investors should focus on building their financial foundation before speculating. (For more on how levels of risk correspond to certain investments, check out: "Determining Risk and the Risk Pyramid.")