If you want to make some investments but have a low-risk tolerance, such as if you are about to retire or prepare for the future, your children are in school, or you want to make a safer geographical fortune, you can refer to this article to understand the risks of different investment methods.
At present, the leading investment methods are stocks, bonds, and funds. You must hear these words often, but have you ever understood them? Here are some similarities and differences you need to know.
The most crucial difference between the three is the additional income stability. The issuing entity of the stock is a listed company, so the income of the stock depends on the company. If the company has more profits and the value of the stock is high, the return will be increased. If the company loses money, the shareholders will also lose money. And the number of earnings and losses is uncertain when buying stocks.
Bonds are made by state enterprises or local public bodies. When buying bonds, you can clearly know the yield of bonds, and you can earn related interest when the bonds mature. Therefore, buying bonds is similar to bank deposits, but the interest rate of bonds is usually higher than that of bank deposits.
There are relatively many types of funds, including index funds, equity funds, hybrid funds, bond funds, and monetary funds, and the yield stability of different types of funds is also additional. Among them, most index funds, stock funds, and hybrid funds are used to invest in stocks, so the risk of benefit is similar to that of stores. Bond funds, as the name implies, invest in bonds, and their returns are relatively stable. Monetary funds mainly invest in treasury bonds, bills, short-term government bonds, and other financial instruments, although the income is not available. The law is determined, but the risk is minimal. Although the risk and return stability of these three types of investment instruments are different, they have one thing in common, that is, the risk is directly proportional to the return.
We dynamically, the yield and price of stocks interact with the interest rate and cost of bonds. With linkage, generally speaking, they may move in the same direction. That is to say, the stock market will rise, the bond market will also increase, and the stock market will fall. The bond market will also fall, but the extent of their rise and fall is very different. Index funds, equity funds, and hybrid funds Because most of the funds invest in stocks, the stock market rises, these funds will also increase, the stock market will fall, and these funds will also decrease.
Therefore, you can choose the suitable investment method according to your economic foundation and needs, taking into account investment return, risk, return time, and other factors. Invest funds in different types of wealth management products to obtain the highest return.
