You need to know the characteristics of each investment to make the best and appropriate investment decision.1. StockInvertors becomes a partial owner of a company after purchasing those shares. This allows investors to vote for the company's board of directors and receive a profit from that company in the form of dividends. At the same time, the stock market does not offer the guarantee of constant income like bonds do. Its value varies from minute to minute. On the other hand, the stock market offers a high rate of return. Investors profit when this value increases. 2. BondsA bond is basically a loan that investors give to the government or an institution in exchange for a predetermined interest rate paid regularly for a specified period. The main purpose of buying bonds is their safety. However, there is little potential return compared to other stocks.3. Mutual Funds A mutual fund is a collection of stocks and bonds in which investors invest their money in a fund, managed by a fund manager. The main advantage of a mutual fund is that anyone can invest money without the time or expertise often needed to make crucial decisions. Mutual funds have less risk with a slightly lower rate
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