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Investment

Do you know you have an investment opportunity?

Investment opportunities: In this article, it is important to know the various ways in which you can make an investment and some of them will be discussed subsequently. An investment can be made through stocks, bonds, insurance, cryptocurrencies, annuities, real estate, etc. Let us get into the proper explanation of these various types of investment opportunities.

What are the various types of investment opportunities?

STOCKS

Stocks in any organization can be explained as any commitment such as shares, held by an individual to show part ownership in a company or firm. Companies issue stocks in order to raise money which would be put into the business to enable growth. Investors, on the other hand, use stocks to increase their income.

An investor on the stock in a company thereby becomes a “shareholder” in the company. This means that each profit obtained from the stocks which were acquired by them would be shared between them and the company which they hold shares in. Stocks are sold in the “stock market” and these stocks are bought and sold through the “stockbrokers”. The process of buying and selling a stock is known as “stock exchange”.

The stockbrokers are the representatives of shareholders, they offer financial advice on the stock to the investors and help to trade stocks between investors while earning a commission from the sales. Stock exchange reaps a lot of rewards but it can also render a firm and its investors out of business. It is advised to buy stocks from different firms instead of investing in just one company. This is among the best investment opportunities of all time.

There are two types of stocks namely; common stock and preferred stock.

This is the most common form of stock investment. Common stock involves a form of ownership in an organization. Investors are allowed voting rights which enables them to choose the chairman who oversees the company. They are allowed an infinite number of votes which correspond with the number of shares they own in the company.

These people bear the most risk in the stock exchange and when the company goes bankrupt, they do not get any compensation for their loss. The dividends from the stock exchange are not fixed.
Unlike the common stock, owners of the preferred stock do not have voting rights. The dividends from profits in stock exchange are fixed. If there is a liquidation of the company, these group of stockholders has a higher chance of getting assets than the common stock shareholders.

BONDS

Bonds are investments or commitments which are simply in the form of a loan, given to an enterprise or governmental body. They are fixed and have a date of maturity. It allows firms/states to borrow money from a group of investors at a fixed interest rate within a period of time (maturity date).

Lenders of bonds can sell their bonds and investors are allowed to buy bonds from sellers after the organizations that borrowed have raised some income. The “coupon rate” tells the rate of interest to be paid by the borrower (issuer of bonds). The “face value” tells the value of the bond to be paid at maturity.

Depending on the issuer’s credit rating, the interest rate is determined. That is to say, if the credit rating is low, the interest rate will increase. Bonds with a high value are called “investment grade”, while those which are not considered to be investment grade but are still of value are called “high yield”. This is one of the best investment opportunities.

INSURANCE

A great method to account for risks is through insurance. Insurance creates financial security by ensuring financial compensation on lost or damaged properties of the insured. In other words, insurance is a form of damage control.

The “insurer” is the company that accounts for damage or loss under a contract while the “insured”, who is the owner of the property. Under a contract between both parties, the insurer promises to take accountability for damage of property which was caused by uncontrollable factors. This investment opportunity is one of the best.

However, the four main types of insurance are:

This accounts for the unexpected death of the insured. The family of the insured will be compensated financially to avoid financial hardships. There are two types of life insurance. The whole life policy involves payment by the insured until he/she dies, while the term life policy requires payment from the insured for a period of time.
In this case, the insured can take out his/her health insurance in the case of illness.
Auto insurance is important in the advent of an auto crash or theft. It protects the insured and helps to clear damage expenses.
In the case of an accident, where the insured becomes handicapped due to uncontrollable circumstances, disability insurance saves him/her from unnecessary expenses.

CRYPTOCURRENCIES

Cryptocurrency involves the electronic/digital transfer of cash from one medium to another with the use of “cryptography”. Cryptography is a method of encoding and decoding messages. Cryptocurrency uses a “blockchain” which is a secure network to perform its transactions. This blockchain allows decentralization.

Cryptocurrency is not controlled by any agency. Trading on cryptocurrency is one of the biggest and most reliable forms of investment. It encores lower transaction fees compared to the bank fees. Types of cryptocurrencies include:

  • Bitcoin
  • Litecoin
  • Namecoin
  • Ripple
  • Dash etc.

ANNUITIES

Annuities are investments made primarily by retirees in order to receive steady payments over time. It can be designed to procure income over a desired amount of time. Examples of annuities are the immediate payment annuity, in which the returns are expected immediately after paying the lump sum. Another example is the deferred income annuity which allows the investor to chose a certain period or age bracket to start receiving payments.

The fixed and variable annuities are other types of annuities. The fixed annuity allows for a periodic payment to the client. The variable annuities ensure higher income value if the investment is made with the annuity yields profit. This is also one of the best investment opportunities.

Here are the four main categories of annuities:

A fixed annuity is a fixed rate of interest, issued by an insurance company to its client. This investment is made into highly rated corporations.
In the variable annuity, the value of your income solely depends on the performance of the investments made. There are no fixed interest rates.
The returns are received immediately after the client pays in a bulk sum of money. Immediate annuities.
Cash-out from the deferred annuities are collected long after the bulk payment has been made. The client is allowed to choose a date for collecting returns.

REAL ESTATE

Real estate investments are one of the oldest and most reliable forms of investing, this method of investment involves the buying and selling, acquiring and ownership of land and/or property(ies) and utilizing them for profit.

Before embarking on a real estate investment, it is advised that one guarantees financial security and has a broad knowledge of real estate investments in order to make wise decisions. This means that an investor is expected to have enough money to embark on real estate whilst having enough money to take care of other expenses.

This also explains that real estate investments require broad knowledge in order to make a profit. This type of investment opportunity serves as one of the best. Before an investor decides to embark on real estate investments, he/she should know the four main types of real estate investments. They include:

This form of investment involves the construction or sale of residential buildings. Examples of such include duplexes, quadplexes, townhouses, etc.
Examples are shopping malls, hotels, offices, etc. It involves the construction, buying and selling of structures that are used for commercial purposes.
Investing in any structures, considered to be used for industrial purposes such as; manufacturing, storage, production, and research is placed under industrial real estate investment. Examples of these structures include; Factories, warehouses, etc. sometimes, commercial real estate are confused with industrial real estates, these structures are thereby classified into the categories that best suit them.
Acquiring land is another form of investment, be it ranches or farmlands, or undeveloped pieces of land. The land is an appreciating asset, therefore, it yields healthy profit.

CONCLUSION

The above article proffers options to choose from when thinking about a way to invest your money or sell properties already invested.

By Victor Alex

Hey, I'm Victor Alex, an Entrepreneur, content developer, Educator and web developer. I am a content writer here on i2careers.com, read and enjoy great motivating and educative content from me.

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