Are you interested in investing but not sure exactly where to start? Or are you someone who already buys or trades a little and wants a good, solid guide to investing to help you make better decisions?
Understanding common strategies is important, and part of this relates to knowing some of the differences in asset classes. The term “asset class” simply refers to a group of similar investment types. Some people prefer to stick with one asset class, while others are much more versatile. At first, it may be a good idea to stick with just a few similar investment types within the same asset class, and then consider expanding your portfolio as you gain more experience and knowledge.
Types of investment to look for
Here’s a quick rundown of the different classes:
• Fixed income or debt: the investor lends money to an institution (usually banks) or the government and earns interest in return. These investment types include CoD and bonds.
• Stocks: Actually buying shares in something (shares).
• Real Estate – Buying, owning, and ultimately selling physical property when the time is right. Obviously, you are not required to live in or even visit the properties you invest in.
• Cash and cash equivalents: the investor deposits the money in a savings account that pays interest or exchanges foreign currency.
• Commodity – Similar to real estate in that you would own physical things, except that it is a “common” product, item, or resource that is needed by many people, such as precious metals, fossil fuels, food, etc. You are not required to physically have them in your possession.
• Derivatives such as futures: This means that you own the trades (options and futures), and the value of the trades depends on the underlying asset. This asset class can be tricky, so if you’re interested, you’ll need a detailed guide to investing in them.
Guide to investing in stocks
If you’re interested in stocks, you should join a good newsletter and resource program that offers all the tools and guides you need to invest in the best stocks. There are many so-called “experts” claiming to offer “best stock picks”, but not all of them may be correct. The REALLY GOOD, legitimate experts don’t give up their picks for nothing. That’s why the best newsletters often require a subscription.
The best guide to investing, particularly with a long-term perspective, is Motley Fool. It is a highly, HIGHLY recommended platform that includes newsletter subscriptions, resources, wealth management tools, etc. They are particularly known for their top-tier stock picks.