3-types of investment.

The term investment has been confused because of its overuse. Everything is generally encircled in the domain of investment like education, televisions, etc. But, these things do not fall exactly in this terminology. Frankly speaking, the products that are bought with the desire to earn profit or income out of them can be called investments such as ownership investments, lending investments, and cash equivalents. Following is a brief description of different types of investments.

 

Ownership investments.

 

Investment in the real estate sector, stocks, business, and precious metals fall in the category of Ownership investment. Precious metals are bought to get some profit or earn income. Like other items in the market, their cost also fluctuates as it depends on various factors in the market. In business or entrepreneurship, your ultimate aim is also to earn profit and maximize the value of your product. Stocks are also a kind of investment as you are given a certain portion of profit depending on the percentage of your investment. The real estate sector is deemed one of the best investments in our country especially nowadays. Investment in the real estate sector is considered highly profitable. For example, if you buy a commercial or residential plot in the Nova City Peshawar, after a few months, you can earn a huge profit by selling it. Considering the locational and other multifaceted advantages of Nova City Phase 1, it is suggested that if you invest in the Nova City Peshawar Division now, you will get unimaginable profit. Undoubtedly, the risk factor goes side by side but the chances for profit are maximum in ownership investment.

 

Lending investment.

 

In Lending investment, chances of risk or loss are comparatively less than in other types of investment. Saving accounts and Bonds are considered examples of Lending investment. A bond is usually issued by the government or a company, and after a certain period, you will be given a decided percentage of interest. There are minimal chances in this type of investment of losing your investment. You will only lose your investment if the government or the company is bankrupted. In a saving account, you give loans to the bank and the bank will pay you a portion of the income that it earned from lending money at comparatively higher rates to other businesses. In saving accounts, risks to your investment are very minimal.

 

Cash equivalents.

 

These are generally items that can easily be converted into cash and are any sort of investment securities with a maturity date of 90 days or less. For example, money market funds are considered equal to saving accounts but in it, a period is decided. Treasury bills, commercial papers, and short-term government bonds with a maturity date of three months or less fall in the category of cash equivalent and are understood as a type of investment.

 

The above-mentioned items are generally considered types of investment. Other things, though are said but they categorically cannot be taken as types of investments.

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