Source: https://www.youtube.com/watch?v=l4TzfPfLMB4
This video taught me that there are three types of investments called Asset Classes.
One of the classes are called "stocks"
Though there are many definitions of "stock," but they're two major ones are, market capitalization and company location. (Is also referred to equities or securities) All stocks has a level of riskiness. You can either lose or gain money. When you own a stock, you're basically owning a part of a company (A very small part of the company) . Thus, if the value of the company increases, your profit also increases. Vice versa. Another way to gain money is the annual profit (dividend). Stock princes can fluctuate or go up swiftly, making it one of the most perilous types of investments, but can be the most rewarding.
The other two types of investments are bonds and cash.
It was interesting to read about the riskiness of owning a stock from your post. I understand that stock prices can suddenly rise and drop, but could you give more detail as to why those prices would drop? Also, can you explain more about cash investments?
ReplyDeleteI forgot to mention earlier, but thank you for sharing your sources.
DeleteThis was very informative, I liked how you shared the topic of stocks and how they work. It's amazing how stocks can drastically increase or decrease based off how certain markets are doing!
ReplyDeleteAfter watching this video, I learned that choosing small companies with potential to grow is actually more risky than I would have thought.
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteTo add on to your post, other than just stocks and bonds being a type of investment. There is another type of investment called mutual funds where you and a group of other people all invest in stocks, bonds, and other securities. Which means that your risk is spread out, so it won't be as risky as stocks. I also thank you for sharing your post.
ReplyDeleteThe video shows a lot of facts and I like how you showed how investing can be a great way of earning money, but how you can lose money too.
ReplyDelete