Stocks, Bonds and Commodities: What They are and Their Benefits
‘Financials’ for stocks, bonds and commodities look good this year.
In 2019, global markets performed better than expected. The calamities in 2019 were higher and so were casualties. Sustenance in global markets was achieved through common global efforts and then, movements.
Performance wise, stocks, bonds and commodities are very solid choices of investments.
Global markets in 2019 also performed better than expected.
Investing is for those who want sustenance in their wealth in the short and long term.
If you are looking to invest, here are three types of investments to consider.
Three Types of Investments
Stocks, bonds and commodities are all trading options that most people trade in. All of these are safe, secure, and reliable and concrete, especially commodities.
Stocks, bonds and commodities are different. They are similar yet they represent their own meaning. All three hold solid ground in the trading realm.
Stocks are shares of a company that are distributed upon purchase to shareholders. They are a part of the company’s total stock worth and value.
There is no limit to holding shares of a company (but this is subject to a company’s policy). What makes stocks valuable is the fact that they stand on solid ground (the company itself).
Companies don’t ‘just end’ in a day, which makes stocks more reliable than other types of investments.
Stocks are a ‘dream come true’ for those who have money to experiment and gold to keep in their pockets.
With stocks, you buy a part or portion of a company, which depends on how much you want to buy. Stock holders, once they buy a company’s stock, become shareholders of the company, and then they start receiving profits against them in terms of dividends paid.
Stocks guarantee money flow.
Talking about stocks; there are two stocks that you need to know of. These are:
Preferred stocks and common stocks.
Here is preferred stocks are those that are defined after common vote and decisions. Preferred stocks are the stocks that are ‘preferred’. In their case, dividends are higher, guaranteed and fixed.
Common stocks, on the other hand, are preferable because they ‘have longer term returns’. They give you more authority and voting rights too. Common stocks are subject to lower volatility. Preferred stocks are highly volatile.
If you are wondering as to what kind of stocks to go for, you would want to consider: growth stocks, value stocks and capitalization stocks.
Furthermore, if you have money, go for high performing stocks. On the other hand, low-mid level stocks are better for those with less money on hand to experiment otherwise.
All stocks are suitable for those who have less cash in hand but still want a reliable source of income; either through stock dividends or as an addition to their portfolios to diversify it.
Preferable stocks to buy in 2020 are Facebook (FB), Activisition (ATVI), Netflix (NFLX), Pinterest (PINS), Canopy Growth (CGC) and The Trade Desk (TTD).
Next, bonds are another option to invest in. They are securer measures of investments; solid and long-term. Bonds are instruments that are issued by the government. They are ‘fixed income instruments’ that represent a loan made by an investor or a borrower.
Companies, municipalities, states use bonds.
Bonds are essentially units of corporate debt that are issued by companies that want to float it and they are securitized as ‘assets that trades’.
Bonds confirm fixed income. They come with a fixed interest rate.
Bonds have a good maturity rate.
Bonds work on the principle of maturity. Once the bond matures, the issuer has to pay back the principal amount of the investor (the amount paid to buy the bond) and the interest (on the given bond, upon its maturity).
Bonds are safer and longer term investments but they are not a ‘quicker way of earning money through investments’.
Bonds have no fees and they come with both, regular interest or compound interest.
They also pay regular and compound interest.
Investors can cash bonds at any time, and they can be purchased for as low as $100.
You can start investing in bonds for as little as $100.
Finally, Commodities are one of the safest ways to invest. One of the most common types of commodities’ is, gold.
Gold is the priciest commodity and the best one to invest in. Silver is another commodity. It is also cheaper this year and against gold, by a major landslide. On the other hand, copper is one of the third commodities to invest in this year. It is in very high demand.
Iron ore is another consider this year because of it will be in high demand in the construction industry this year.
Commodities are the strongest amongst stocks and bonds. They, however, require higher initial capital to invest in or to start with. Types of commodity investments include energy commodities, metals, minerals, forestry, agriculture and fisheries.
Coming to the conclusion of this article;
Stocks, bonds and commodities are three of the most common types of investments.
Stocks are a part of ‘a’ company’s share. Payout of stock holders is through ‘dividend payout’.
Bonds are government guarantees and they just don’t collapse in a day or two because of volatility. Bonds are not subject to volatility or free-market-mechanism principles’.
While stocks are ‘shorter term investments’, bonds and commodities are ‘longer term investments’. Stocks includes shares of any company, bonds include federal government bonds, treasury bills, treasury notes, municipal bonds and treasury bonds.
Commodities, on the other hand, include gold, silver, copper; raw materials such as basic resources; agricultural products, grains and rice.
Commodities come under the category of food (sugar, corn, wheat), energy (natural gas, Brent oil etc.) and Metals.
If you have made up your mind about investing, start today with stocks if you have less money on hand, bonds for safety in the country you live in and commodities for a bigger grasp on your financial investments.