FinanceFix
Mariana San Martin Quiroz
Student of Abraham Lincoln Peruvian North American School - La Molina
Grade 9 - Class Elliot Ness
Investment Basics for Beginners​
There are many different types of investments.
Investing means committing resources — usually money — with the expectation of earning a future return or profit. Some types of investments are riskier than others, but all involve some level of risk because they depend on market prices and the overall state of the economy.
Some common types of investment are:
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•Stocks: buying a “small piece” of a company.
- Advantage: high growth potential.
- Risk: prices can jump up and down.
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•Bonds: lending money to governments or companies.
- Advantage: steady, predictable returns.
- Risk: lower returns than stocks, and some risk if the borrower defaults.
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•ETFs: a basket of stocks or bonds (lots of them joined for you to invest on all them).
- Advantage: instant diversification, that may secure that you although one can deflate you still receive money from the others.
- Risk: management fees — these are payments you make in exchange for a service, since they are usually accessed through platforms or brokers. Another risk comes from market swings, as the value of ETFs can go up or down depending on changes in the market.​
•Real Estate: owning property for rent or resale (kind of passive income).
- Advantage: tangible and some kind of “secure” asset, possible rental income.
- Risk: requires large upfront money (large amount to start if you want to own/buy a property) and upkeep (make sure your property has a value on the market that advantages you, usually investing in advertising or remodeling it).​
•Savings Accounts: Low-risk accounts that earn small amounts of interest.
- Advantage: Very safe and liquid (easy to access money).
- Risk: Low returns that may not keep up with inflation.
​•Mutual Funds: Similar to ETFs but actively managed by fund managers who select the investments (like banks or organizations).
- Advantage: Professional management and diversification.
- Risk: Affected by market fluctuations.
Always remember the riskier the inversions are, the more informed you need to be about them, have practice and learn dorm error over time.