Consumers have typically sought to invest in areas that provide investment returns; some relatively safe and others quite risky. These days, consumers looking for alternative methods of investment rely on both popular forms as well as lesser-known methods. Understanding the most common types of investments--stocks, bonds and insurance--will help consumers make wise choices.
Stocks
Stocks are among the most common forms of investment for many consumers, though they carry the risk of dropping in value during low points in the economy. Stocks often vary in value on a day-by-day basis and require more attention when tracking versus other methods of investment. However, because they are considered fairly high-risk, stocks often offer the greatest returns on a person's investment.
Bonds
Bonds are considered a relatively safe investment, according to Investopedia.com, which states that government bonds are often offered free of risk. However, because they are considered so stable, bonds have a relatively low rate of return on investment and may take many years to mature, depending on the type of bond purchased.
Mutual Funds
Mutual funds are a safe investment for many who wish to earn more return than that usually achieved via bonds but who don't want to commit to the volatility of the stock market. Mutual funds are offered to large numbers of investors, whose pooled monies purchase large bonds or stocks in companies, corporations or government-sponsored entities. Mutual funds can be purchased from a variety of investment firms such as Vanguard, T. Rowe Price, Charles Schwab, Fidelity and Mutual.
Gold
Before modern financial institutions made their mark on society, the mark of a man's wealth and important used to be based on how much gold he owned. Gold is considered a fairly safe investment in troubled economic times, according to Christopher Wood of Business Exchange. Gold prices typically range between $1,000 an ounce to nearly $4,000, depending upon market conditions.
Life Insurance
Some types of life insurance, such as whole life, offer options for consumers to save for retirement or accrued cash value. Whole life insurance is a lucrative investment for many individuals, especially with policies that enable the policyholder to have some say as to where his or her premiums are being invested. Interest and dividends earned on such invested monies through life insurance premiums may be tax-deferred as the policy generates cash value, states FinancialWeb.com.
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