What are investments?
Investments are assets or items that individuals or organizations purchase with the goal of generating income or appreciating in value over time. Common types of investments include:
1. **Stocks:** Shares of ownership in a company, offering potential dividends and capital appreciation.
2. **Bonds:** Loans made to corporations or governments in exchange for regular interest payments and the return of the principal amount at maturity.
3. **Real Estate:** Property investments, such as residential or commercial buildings, land, or rental properties, aiming for rental income or capital gains.
4. **Mutual Funds:** Pooled funds managed by professionals that invest in a diversified portfolio of stocks, bonds, or other securities.
5. **ETFs (Exchange-Traded Funds):** Similar to mutual funds, but traded on stock exchanges like individual stocks.
6. **Commodities:** Physical goods like gold, silver, oil, or agricultural products, which can be bought and sold for potential profit.
7. **Cryptocurrencies:** Digital or virtual currencies that use cryptography for security and operate on decentralized networks.
The primary purpose of investing is to grow wealth over time, either through income generation (like dividends, interest, or rent) or capital appreciation (increasing the value of the investment). It's important to consider risk tolerance, investment goals, and time horizon when choosing investments.
