A Beginners Guide to Investments and Investment Terms

| April 24, 2013
Investment Terms

Investment Terms

Investment can be a bit tricky when it comes to beginning investors. Most beginners will need some sort of help in order to navigate the world of investment. Here is a beginner’s guide to investments and some investment terms broken down into plain English.

Terminology

  • Investments- purchases that show a profitable return – collectibles, property cash
  • Returns – Profits that are earned from your investments
  • Risk – losing buying power

Types of Investments

Many different types of investments are available for investment, no matter if you are a beginner or a seasoned pro. Here are some of the things that you can invest your money in:

  • Currency
  • Shares of a company
  • Bonds

Each one will have its own risk and reward ratio. Remember that there is no such thing as a investment that has no risk. Each type of investment will have a risk factor. If you are looking to invest in a portfolio, you need to get in touch with a reliable broker and discuss your financial position with them in order to get the best interest back on your investment.

 

Returns and Payment from Your Investment

Payments from your investment can take several forms such as rent, interest, capital gains or interest. If you want easy access to the money you have earned, be aware that your return on investment or ROI will be lower, as will wanting a secure guarantee that you will get all of your investment back.

More Risk Definitions

Money put into long and secure deposits can lose their interest or buying power over time due to inflation. If you are using stock market investing, the mood of the market is going to reflect what you get back. Index linked investment could earn you less depending on the current inflation rate.

Getting a Broker for Your Investment

Once you have the means necessary to invest in your choice of financial instruments, then it is time to get a broker to handle this for you. Before you speak with any potential broker, look up his or her license and take a look at the profit/loss ratio for this broker. A face to face meeting is best, but many do their investing online with online brokers. Know what you want to invest in and make sure that the company that the broker is working with has not had any sanctions in the last 10 years. If there are sanctions, you need to choose another broker for your own financial safety. Talk to current customers of the broker in question so that you can gauge for yourself the truth of the matter.

Knowing what the terminology is when dealing with investment and knowing what investments are out there can certainly help you choose the right financial investment for your situation. For those of you in the mood to invest in Forex, check out some of the Forex Forum posts on different sites. An educated investor is a smart investor. Keeping your investment safe should be priority one as much as possible. Knowledge is power and the more that you know; the better off you will be able to judge the situation for the most part. No matter what investment you are interested in, research the investment before investing your hard earned money and time into the chosen investment. Remember also that risk is a part of any investment that you put money into.

Author Bio: John Pettis has invested into a great many funds and keeps her ear to the ground in the Forex Forum. Her advice can be followed on her current blog.

A Beginners Guide to Investments and Investment Terms

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