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Information is power. More information (and thus, more choices) means more power. And that is why I ask you this: what is the best kind of security to invest in if I wish to gain the most money after 5-10 years? There are several options, and I am not limited to committing my money completely to a single type of security. Keep in mind that I do not know much about investing, so any information on the subject that you would like to share will be appreciated. Links to credible sites would help as well.
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What I know about securities:
Common Stock - "Regular" stocks. Depending on the company, these have huge potential for gains (and huge potential for loss). Other companies are low-risk. Some stocks return dividends.
Preferred Stock - Stocks that yield a constant rate of dividends. These are probably bad for long-term investing, since the stock's value has the potential to rise higher. Also, preferred stock gives the holder less or no rights (e.g. voting).
Mutual Funds - Collective pools of securities. Types:
-Sector (e.g. utilities)
-Domestic (e.g. US companies only)
-Regional (e.g. Pacific Rim companies only)
-Funds with money in developing countries/newer industries are more risky.
Bonds - A certificate that grants interest at a fixed rate for a certain number of years. You get your original money back when the bond expires.
A good rule: don't invest in a stock just because it has been climbing for the past X months. Look at their business model, management practices, sector growth, etc. and determine if they are going to grow.
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If you have never invested before, don't bother posting. Off-topic replies, trolling, and the like will be quickly ignored.
Post has been edited 1 time(s), last time on Mar 25 2011, 12:03 am by rayNimagi.
Win by luck, lose by skill.