Top 12 Must-Know Different Types of Investments
3. Bonds
Bonds are debt securities issued by governments, corporations, or municipalities. When you purchase a bond, you are lending money to the issuer in exchange for interest payments and the return of your principal at maturity.
Pros:
- Lower risk compared to stocks
- Steady income through interest payments
- Suitable for conservative investors
- Government bonds are often considered safe investments
Cons:
- Lower returns compared to stocks
- Sensitive to interest rate fluctuations
- Risk of default with corporate bonds
- Inflation may reduce real returns
Click NEXT PAGE to learn more…