Now you might immediately ask yourself, “Where do I start?”

I got you covered! Before you go all out and put your life savings into some stock your uncle told you to invest in, let us learn about the possible avenues we can take for investments.

Once you’re familiar with the various types of assets, you can start thinking about putting together a mix that fits your personal circumstances and risk tolerance.

Growth investments

These are better suited to long-term investors who are willing and able to weather market ups and downs.

Shares

Shares are classified as a growth investment because they can help increase the value of your initial investment in the medium to long term.

If you own stock, you may also receive dividends, which are essentially a portion of a company’s profit distributed to its shareholders.

Of course, the value of your stock may fall below the price you paid for it. Prices can fluctuate daily, and shares are generally best suited to long-term investors who can stomach these ups and downs.

Shares, also known as equities, have historically produced higher returns than other assets; however, shares are regarded as one of the riskiest types of investment.

Property

Property is also regarded as a growth investment because the value of houses and another real estate can rise significantly over the medium to long term.

However, property, like stocks, can lose value and carry the risk of loss.

It is possible to invest directly by purchasing a property, but it is also possible to invest indirectly through a property investment fund.

Defensive investments

These are less risky than growth investments because they are more focused on generating consistent income rather than growth.

Cash

Cash investments include checking accounts, high-yield savings accounts, and term deposits.

They usually have the lowest potential returns of any investment type.

While they have no chance of capital growth, they can provide regular income and help protect wealth and reduce risk in an investment portfolio.

Fixed interest

Bonds are the most well-known type of fixed-income investment. Bonds are essentially when governments or companies borrow money from investors and pay them a rate of interest in exchange.

Bonds are also regarded as a defensive investment because they typically provide lower potential returns and lower levels of risk than stocks or real estate.

They can also be sold relatively quickly, like cash, though it is important to note that capital losses are possible.