Investing is a way of making investments with an aim of gaining profits in the future for a specific period of time or a definite amount. How does one go about investing? Well there are different ways in which you can invest but here I am talking about four popular ways to invest in stocks and shares. To invest in stocks and shares, means to put money into an entity by the express intent of gaining a profit or a return in the near future. Simply put, to invest simply means possessing an entity or an asset with the express purpose of generating an income or an increase in your investment that is either a gain in the value of that entity over a certain period of time or an increase in your net worth.
The first and the foremost type of investment that most people engage in is buying and trading the stocks and shares in the companies that they follow. This is the most common type of investment activity among all investors and thus most investors are engaged in buying stocks and shares to grow their portfolio. The problem with this type of investment is that, it is quite difficult for the investors to have control over the buying and selling of stocks and shares as they are dealing with a single entity.
The second form of investments is in bonds and mutual funds. The biggest advantage of this form of investment is that, it allows you to control more of your portfolio. In case, you are looking for a low risk option then the mutual funds are the best option for you. They are managed by professionals and they use safe investment strategies to provide you with a regular income generating income.
The third type of investment that most of us engage in is in commodities like stocks and shares. Commodities like oil, gold and currencies are generally bought and sold on a daily basis. These forms of investments are ideal for those who are looking for a short term income generating option. You can buy a commodity at a reasonable price and sell it after sometime for a higher profit and that too without having to incur any additional cost.
Fourthly, there are some specific bonds and mutual funds that allow investors to invest in real estate properties. There are some investors who use these types of investment to buy homes and develop them. However, most investors prefer to earn money from these real estate properties by renting them out. The rent that you will get from these properties will help you offset the cost that you had initially incurred for the purchase of the properties. This form of investment is ideal for those who want to generate regular income but do not want to lose money in every deal that they make.
The above mentioned three categories of investment are the most common ones that most of us are familiar with. But there are many other investment options that you can choose from like derivatives, precious metals, equity markets and stock markets, derivatives, bonds and mutual funds. These are just a few of the asset classes that are available for you need to research extensively to find out what your options are.