The Many Different Types of Investments, and How They Work
Most people have heard of stocks and bonds, but there are a ton of different ways to invest your money—mutual funds, CDs, real estate...the list is seemingly endless. Here's our reference guide to all the different types of investments and what they mean. You'll probably come across a handful of terms associated with your investments. We've listed a few of them below. These terms generally refer to the actual stuff you're invested in, but, of course, they have specific definitions, too. They include: Assets : An owned resource expected to increase in value. Holdings: The specific assets in your investment portfolio. Portfolio : Your "portfolio" refers to all of your investments, as a group. Diversifying your portfolio means investing in a variety of assets. Asset classes : A group of assets with similar characteristics. Generally, stocks, bonds and cash. Investopedia breaks up all the different types of investments into these basic categories:...