Different risk profile investors
Individuals have different risk taking capabilities when it comes to their hard earned money. The most common investment types that they deal in are stocks, bonds and real estate.
Stock market investments have the potential to generate maximum amount of returns but they carry market risk at the same time. Such investments are fairly liquid in nature so investors can pull out their invested capital at any trading session. Such investments are heavily volatile as they can swing sides at a fast pace with any development in the company or the overall economy.
Those, who are not so aggressive in investing, can opt for bond investments, treasury bills, CD’s and mutual funds. These are low risk investments but the returns are a bit subdued when compared to stock market returns. The only issue with such investments is that they are not so liquid, so one cannot count on these in times of urgent requirement.
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