4 Types of Investment Asset You Must Know

1. Cash

Cash is the most liquid and flexible asset of all. It is said that "Cash is King", as you will have the agility to invest in all other types of asset class using the cash when opportunity arises. You can save the cash in saving account to gain interest. The downside of keeping plenty of cash is that inflation will devalue your cash as saving account interest in most place of the world cannot cope with the inflation rate.

2. Bond

Bond is a form of  "I Owe U". The issuer sell bond and There are two main categories of bond issuers in the market - corporate bond and government bond. The issuer pay interest (can be fixed or variable) to the bondholder over the period of the bond, and the principle must be returned to the bondholder at the maturity date of the bond. The bond is a good form of regular income and your may have a chance to hedge against inflation if you manage to buy a bond with good yield. However, the risk is that the bond issuer can default the payment if they got into financial problem. In that case, you may lose part or full sum of your money.

3. Share

Share, or stocks, is a ownership to a business. Being a shareholder of a company, you are entitled to get dividend as at when the company announced dividend payout. You are also entitled to vote in their annual general meeting and extraordinary general meeting for company policy and resolution changes. You participate in the growth of the company overtime. When you invest in a good company, you can anticipate regular dividend income and long term appreciation of the share. The possible risk is that share price fluctuate from time to time. If you get caught in the wrong cycle, you may actually lose money.

4. Property

People buy property to collect rental and to keep for long term appreciation. Property investment are stable in nature and it provides stable income and potential future growth. However, Property is the least liquid asset of all. the process of selling off a property can be time consuming. On top of that, there are many ongoing cost as property has to be maintained from time to time. Property prices can fall depends on the location and economic situation. Make sure you have enough holding power when you invest in a property, otherwise you may end up losing more money than you invested.