Investment - An Overview of the Main Types of Investment

You want to know what you can invest in. The investment options we have today are many and different. It is worth learning more about them in greater detail so that you know which option is best for you.
Bonds
Bonds are financial instruments with which you lend money to a company or to the government. In turn, the borrower is obliged to repay you the money with some interest. The interest is paid out on a regular basis, while at the expiration date of the bond (its maturity date), you get to receive the initial amount of money you have invested.
Bonds are the least risky type of investment in general. Government bonds, in particular, are considered to be the assets with the lowest financial risk. As the risk is low, the returns on this type of investment are also relatively low.
Stocks
Stocks, also called equities, are financial instruments with which you virtually buy a small part of a public company. You become a stakeholder and you are entitled to receiving part of the company's profit in the form of dividend.
Stocks hold higher financial risk then bonds because their market prices are very volatile and get affected by all sorts of events and even speculations. At the same time, stocks bring higher returns than bonds.
Other Types of Securities
Now you can make an investment in various types of derivatives - call options, put options and futures. These securities work based on more complex mechanisms. They usually bring higher returns, but they are riskier.
Mutual Funds
Mutual funds are more complex investment assets. They consist of both bonds and stocks. When investing in a mutual fund, your money is pooled with the money of other investors. Together you pay a professional to manage your assets. Each mutual fund has a specific investment strategy. Most specialize in specific types of securities. As mutual funds are more complex, the risk and profitability of each asset should be assessed individually.
Commodities
Investing in commodities, such as gold and oil, is not reserved only to big investors. In fact, given the recent economic downturn, the price of gold has reached sky-high levels due to many investors buying a lot of it. In general, commodities can bring you very good returns, but they are also considered among the riskiest of assets due to the volatility of their market prices.
Foreign Currency
Now you can buy and sell foreign currency directly through an online broker. This has made foreign currency investment really popular among novices. What you need to know about Forex investment is that it requires the same complex analysis as other types of investment. You can expect returns that are not particularly large, but the risk is relatively low as well.
Real Estate
Investing in real estate is not buying a house to live in, but buying a property that you intend to rent and/or to sell at a profit later on. In general, investment in real estate requires a lot of money. Even though in the past it was considered relatively safe, the situation is different now given the shaky market.