What are the 7 types of investments?

Types of personal investments

An investment, in general terms, is the use of resources in the productive or capital sector with the objective of achieving benefits or profits and its importance lies in obtaining financial freedom. To make an investment one must have financial resources (money). Investments increase through interest, dividends, shares, appreciation of assets (increase in value). When you have savings, you must visualize the portion and duration of such savings, before making the decision to invest and define where to use those resources. Tips for making an investment. The important thing not to risk the personal investment is to follow certain criteria taken from the experience to avoid the risks and to obtain the greater possible profitability. The following six investment tips are presented below.

Types of investments in mexico

It is important that you know the difference between investing and saving. In the case of financial health, saving is only the first step, since money that is not put to work loses value over time.

The reality is that this is true because of a macroeconomic factor called inflation, which detracts from the value of your savings by making goods or services more expensive. Your savings cannot compete with this increase in price and therefore loses purchasing power over time.

Those who do not want a lot of risk and, therefore, little profit, are known as “conservatives”. The “moderates” are those who seek better returns, but with slightly more controlled risks and, finally, the most “risky” profiles are those who are not afraid to invest considering a higher risk knowing that they can obtain better returns than the rest.

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On the other hand, we find variable income, which is a type of investment contrary to fixed income. In this investment we do not know the interest or dividend that we will be paid during the contracted period. When we talk about investing in the stock market, we refer to investing in variable income.

-Bonds.    They work as a kind of loan that investors make to companies or governments. These are more promising investments, but the returns are also lower. Government bonds become much safer.On the other hand, there are higher risk bonds, which offer much higher interest, but have a high probability of default.

Mutual Funds.    This type of investment consists of a diversified portfolio of assets that is generally managed by a financial advisor and contains a variety of stocks, bonds and other types of investments.

Thus, for example, acquiring a franchise will increase the chances of success because they are proven businesses unlike a business that starts from scratch, with the acquisition of a franchise there is a brand that has already proven to have some success and is known by the people.

Types of investors

stablish an investment profile and risk aversion, be clear about the objectives we want to achieve, the time horizon we propose for those objectives… All these previous steps serve as preparation and awareness of the former saver to become a good investor.

This type of financial product is one of the best known by people even if they have never invested, because who has never heard of equities? Indeed, when we talk about equities we are referring (among other assets) to the well-known shares that are bought and sold on the stock exchange.

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So we assume more risk, since the value can go down, but we also have a better chance of obtaining better returns than in other types of products. In this category we could also include investment in currencies or commodities.

Historically, this type of investment product has been preferred by the most conservative investors. Why? Fixed income assets have the characteristic that they offer a fixed return on the investment made, over a given period of time.