The word, investing, conjures up fear and uncertainly for those new to the investment game. Many investment opportunities exist including stocks, bonds, mutual funds, commodities, business entities and real estate. Knowing which direction to go can help investors build a strong financial portfolio and achieve both short and long term investment goals.
Investing can be accomplished in several ways. Individuals can establish financial investment accounts online using tools provided by their investment firm. Locating a good investment company is essential. Some of the more popular online investing companies include Fidelity, Vanguard, Charles Schwab, BNY Mellon, and Merrill Lynch
Individuals who invest in stocks are essentially purchasing a small portion of a company. Most people think of large corporations such as Microsoft and Wal-Mart. However, investors can purchase shares of stock for start-up, privately-held and publically-traded corporations and earn quarterly dividends based on corporate profits.
Investing in the bond market offers investors more choices than investing in the stock market. Common bond investments include corporate, municipal, government, asset-back securities (real estate mortgages, home equity loans, credit card receivables, and student loans), and international bonds. Buying and selling bonds can be accomplished by using the services of a bond broker or through the U.S. Treasury website at TreasuryDirect.gov.
Mutual funds consist of multiple investments including stocks, bonds, securities and real estate. Investing in mutual funds allows individuals to create diversified portfolios without having to purchase a variety of investing products.
Commodities investing can lead to substantial portfolio profits, but requires a strong understanding of what commodities are and how they are traded. Common commodities include gold, lumber, sugar, wheat, and oil.
Investing in businesses can include buying shares of a start-up business, angel investing, or buying a shopping mall by pooling resources through an investment group. Business investing carries a high-level of risk and should be avoided by newbie investors.
Real estate investing encompasses buying and selling real estate notes and land contracts; providing seller carry back financing or lease to own properties; purchasing real estate for house flipping or rental purposes; investing in commercial real estate; and buying shares of real estate investment trusts (REITs).
It is important to become educated about the various types of real estate investments. Good resources for obtaining real estate investing information include Trump University, REIClub.com, CREOnline.com, and National Real Estate Investors Association at NationalREIA.com.
Short and long term real estate investing opportunities exist. Short term investments might include house flipping, seller carry back trust deeds, promissory notes, and buying REIT shares. Long term could include rental properties and rent to own homes.
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Published on January 19, 2010 at 02:48 AM