The goal of investing is to put your money to work in one or more types of investment vehicles in the hopes of growing your money over time. Sometimes this means stocks, sometimes that means bonds, sometimes the vehicle may be some alternative asset like a stock fund, ETF, or even a money market fund.
Let’s dive into some of the various types of investment options available in the market today. These are your top-rated examples of various types of investment.
Stock funds: There are a number of investment vehicles that offer funds of mutual funds, exchange-traded funds (ETFs), and mutual funds and ETFs. These are all either actively managed or passively managed. The benefits to investing in this way are that you are exposed to the performance of the broad market, so there are no fees associated with your individual holdings. You also have the flexibility of choosing which fund to choose based on the performance you seek out.
Small cap stocks: Small-cap stocks may offer you a different perspective on current business trends, which could be a good way to identify stocks with potentially high profits and great growth prospects over the next year or so.
Equity Index Funds: Equity index funds are the most popular way to invest in equity mutual funds. They invest in the entire market. However, there are a number of limitations to the way equity index funds can be used. The most obvious limitation is that you have little ability to know your holdings in advance. Also, this is a very broad type of investing and often simply a good place to start.
Aggressive bond funds: These are the mutual funds, exchange-traded funds, and ETFs that focus on higher-yielding bonds. They are easy to understand, and are offered to investors in a range of rates.
Low-yield bond funds: These are the mutual funds, exchange-traded funds, and ETFs that focus on low-yielding bonds.
Fixed income bond funds: These are the mutual funds, exchange-traded funds, and ETFs that focus on fixed income investments.
Annuities: These are the mutual funds, exchange-traded funds, and ETFs that focus on annuities.
How should you use your money?
To get you started, we’ve laid out the options available to you. Depending on how you spend your money, the way you invest will likely depend on your personal preference and overall goal. Keep in mind that you will still have to manage your money appropriately to get the most bang for your buck.
Finally, remember that you should look at a mutual fund or ETF as a long-term investment that you buy and hold, in addition to any mutual funds or ETFs that you buy, as needed. Mutual funds and ETFs typically have higher fees than any individual investment (in most cases) and can have significant fees added to your returns. So try to use them in a mix of your regular investment and as your backup plan in case things do not work out as planned. And of course, always be sure to visit websites like https://www.sofi.com/investing-101-center/ to get all the information.