Investment Essentials: Where Should I Park my Money?

Bank savings, time deposits, and money markets are secure ways of keeping your hard-earned money. However, these cash equivalents may not be the ones you are looking for if your primary aim is value appreciation, capital growth, passive income, or retirement fund. Growth rates in these financial parking lots are extremely low. In fact, they are too low that they can be easily beaten by inflation.

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The following investment machines, while not as low-risk as those mentioned above, offer much higher ROI potential and boast crucial financial aspects that only the investor who thinks outside the box will enjoy:

Stocks
More formally known as equities, stocks signify ownership of a corporation or holding company. The cornerstone of most asset management plans, stocks represent all industries and have proven to be the most profitable investment machines in the LONG TERM. You can invest directly in these companies through stock brokers who have access to stock exchanges.

Bonds
If you invest in bonds, you are considered a lender. Governments and companies who have good credit ratings issue bonds to financial institutions to serve as proof of loan that bears high interest rates. Bonds are considered generally safer than stocks but their yields may not be as high.

Pooled funds
Pooled funds are ideal for investors who have little knowledge about stock or bonds or have very little time to monitor market trends due to busy schedules. Usually in the form of unite investment trust fund (UITF), variable universal life policy (VUL), or mutual funds, pooled funds are like large baskets where investors deposit their money to form a single, massive fund. This ‘pool’ of money is then placed under custody of a professional and experienced asset manager who make investment decisions and actions on behalf of the investors.

Image source: bankrate.com

Lewis Daidone, a certified public accountant, works as a consultant for BlackRock and specializes in investment management. His work focuses on enhancing infrastructure and accelerating growth and improving fiscal results. Know more about his professional background on LinkedIn.