If you are going to orient the stock market you first will be amazed by the possibilities. But because of the high risks and the knowledge that is sometimes required, not all investments are equally suitable for novice investors. We have put the most common forms of investment for you at a glance .
By far the best known way of investing is buying stocks. You can buy a share in a company that makes you part owner of the company. As a shareholder, you have a say in the shareholders’ meetings and share with you in any profit that is called dividend. The value of your shares may be increased when the affairs of the company are going well and the demand for its shares increases. If the price rises and you decide to sell your shares if you make gains. But the price may also fall, and then you make a loss. You can invest directly in shares or where several companies are listed, using an equity fund.
Invest in Investment funds
If you are going to invest in a mutual fund you buy participating nature to an investment fund that invests in various securities. Mostly invested in dozens of companies by the specialists of the fund which creates a large and diversified portfolio. With mutual funds, with a relatively low amount you can realise a good spread very quick. Mutual funds are therefore very suitable for novice investors .
Invest in Securities
When buying a bond in fact you loan money to a company, an institution or to the state. In return you will receive an interest rate that is generally higher than in a savings account. At the end of the term you will receive your entire deposit back . Only when a company goes bankrupt you lose your money. Investing in bonds is a relatively safe form of investment . However, the interest rate of a savings account can rise making you less yield on the bonds.
Invest in Options
An option gives the right to buy (call ) or sell (put ) listed shares at a fixed price in the future. It’s always about a package of one hundred shares. In addition to stock options , there are also options on bonds , currencies, gold and stock market indices . Investing in options is quite risky and additionally requires a lot of time and attention. Options trading is therefore particularly suitable for active and more experienced investors . Click here if you want to know more about binary options.
Invest in Warrants
This is a tradable right to buy new shares within a certain period at a certain price. A warrant resembles an option.
Of course there are many other forms of investment. You can think of futures, and trackers, turbos. These features are due to the greater risks and the required knowledge and experience especially suitable for more experienced investors. Furthermore, you can still invest in precious metals like gold, currencies like the dollar and real estate.