Candlestick Trading Blog

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When investing stock there are five types of assets that you may own. In today's article we will discuss five assets that provide great investment opportunities.

Common Stocks – Common stocks see the biggest ups and downs in the stock market and they are the typically investment asset for ownership in a company. With this type of stock, stock holders don't have voting privileges or dividend rights, but they have a large profit potential.

Preferred Stocks – Preferred stocks offer limited benefits to shareholders and they tend to be slow, stable investments that don't bring huge sums of money but are steady performers for an investment portfolio. When investing stock, these stock holders, will typically receive dividends that are pretty high yet again they have a limited upside.

Bonds – Bonds can include municipal bonds, savings bonds, U.S. government treasuries, corporate bonds, and more. Bonds are a debt security where the issuer loans money to the borrower and the lender decides how much will be lent as well as what the agreed upon interest rate and the term of the loan will be. The return on investment for the issuer is the interest accrued throughout the term of the loan.

Money Markets – These funds are highly liquid and are designed to protect your purchasing power. Money markets are similar to mutual funds and these fund managers will take your cash, invest it in conservative short term commercial paper and they pay you your portion of the interest earned on these investments. See also money market mutual funds.

Real Estate Investment Trusts – Real Estate Investment Trusts, also known as REITs, are real estate companies that offer common shares to the public and it is similar to investing stock in that REIT stocks are similar to any other stock that represents ownership in a business. There are three different forms that REITs can take including mortgage, equity, or a hybrid of both.

Mutual Funds – Mutual fund investing provides the ability for investors to purchase stocks and bonds with much lower trading costs that if they tried to go it alone. Mutual funds are companies that pool their money from many investors and invest the money in stocks, bonds, short term money market instruments and into other assets or securities. They can include exchange traded funds, index funds, and actively managed funds. When you invest in mutual funds you are actually buying shares in a company and you become a shareholder.

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