price difficult or impossible to sell Fixed income interest rate is risk of borrower most bonds can be • • • investments: usually fixed defaulting is very low bought and sold for government bonds quickly through bonds with longer Government and • but can be low to high investment dealers terms will usually corporate bonds and for corporate bonds pay higher interest some bonds are debentures • rates bond values go up traded on stock • and down with exchanges high risk "junk" • changing market bonds offer even interest rates higher rates Mutual funds: may include low to very high, most mutual funds • • • interest, dividends depending on what the allow investors to and capital gains (or fund invests in and on cash in (redeem) their Units in a pool of money that's losses) the skill of the fund holdings on short managed for a large manager notice return will depend number of investors • on manager's by a professional investment money manager decisions and on the management fees charged Real estate: depends on price, low to high takes more time to • • • • location, real estate depends on price, sell than many other Property such as market, etc. location, real estate investments land or houses market, etc. may include rent hard to sell small • • or increase in value portions depends on market • Direct investment: low to very high medium to very high low • • • depends on type of • success depends may be very hard to business, competition, Investing your • • on the business sell money to finance a skill of the business concept, the private business manager, and the manager and on economy economic
price difficult or impossible to sell Fixed income investments: Government and corporate bonds and debentures • interest rate is usually fixed • bonds with longer terms will usually pay higher interest rates • high risk "junk" bonds offer even higher rates • risk of borrower defaulting is very low for government bonds but can be low to high for corporate bonds • bond values go up and down with changing market interest rates • most bonds can be bought and sold quickly through investment dealers • some bonds are traded on stock exchanges Mutual funds: Units in a pool of money that's managed for a large number of investors by a professional money manager • may include interest, dividends and capital gains (or losses) • return will depend on manager's investment decisions and on the management fees charged • low to very high, depending on what the fund invests in and on the skill of the fund manager • most mutual funds allow investors to cash in (redeem) their holdings on short notice Real estate: Property such as land or houses • depends on price, location, real estate market, etc. • may include rent or increase in value • low to high • depends on price, location, real estate market, etc. • takes more time to sell than many other investments • hard to sell small portions • depends on market Direct investment: Investing your money to finance a private business • low to very high • success depends on the business concept, the manager and on economic • medium to very high • depends on type of business, competition, skill of the business manager, and the economy • low • may be very hard to sell