Different Types Of Investments

By Cleveland Jernigan

With interest rates so low, trying to find a way to save money and earn interest can be difficult. Your run-of-the-mill bank savings account really only earns pennies on the dollar, and this doesn't provide you with much for the future. There are some other investments, however, that can help you plan for retirement or stockpile for a rainy day.

If you work for a company that offers retirement investment options, definitely take a look at what's available. A 401 (k) is a great opportunity for investment, and in this plan, part of your monthly salary is tucked away in a savings account earning interest, generally much more than a bank savings account. Plus, your boss typically also matches some of the money you invest. So for every dollar you put in, your company also adds in a dollar. Suddenly that $5,000 you put in your 401 (k) becomes $10,000, which is a great deal for you. If this isn't an option at your place of business, most banks offer Investment Retirement Accounts or IRAs. There are several different kinds of IRAs, and they can provide you with another great way to save for those retirement years.

These days you hear a lot about investing in precious metals, such as gold or silver. The reason why people invest in these metals is because they tend to hold their value over time, and currently the price of gold especially is very strong. You can simply buy gold coins and store them in a good quality safe or a safety deposit box. Another option is to invest in a gold mutual fund, either a gold mutual fund or a gold exchange-traded fund. With a gold exchange-trade fund (ETF), the only asset in the fund is gold bullion. With a gold mutual fund, the investments are more varied, or diversified, and you will be putting money into mining operations for gold and other precious metals, as well as in gold bullion.

On that same topic, there are many other types of ETFs and mutual funds that can be smart investment opportunities. These are both funds, but they have some key differences. Both funds are generally diversified, spreading your money among many different holdings to decrease the overall risk. The value of your mutual fund is set at the end of each trading day. Mutual funds have some expenses attached to them, such as commission fees and redemption fees, and these funds are professionally managed.

An ETF is somewhat different, and often the fees associated with ETFs are lower than you would pay with a mutual fund. Another way that these two investments differ is in how the value is set. An ETF's value will rise and fall throughout the trading day, and you can buy and sell shares during trading, much like you can a stock. This can be an advantage because the value at the end of trading might be a bit lower than it is at some point during the trading day.

Funds, whether they are mutual funds or ETFs, tend to focus on a specific industry or area of the world or perhaps a currency. For example, there are Asia Pacific funds with investments holdings spread in a variety of Asian countries, such China, South Korea, Indonesia, the Philippines and other nations. A China fund is another option, and this would include holdings only in China and Hong Kong. The holdings for either of these funds might include investments in telecommunications, electronics, banking, real estate, energy or other industries. Another type of fund might be an energy fund, which would include investments in gas or oil exploration and production. There are thousands of funds to consider, so talk to a financial advisor about what will be best for your portfolio.

About the Author:

Cleveland Jernigan likes writing about investments. For more information regarding Asia Pacific investments or to learn about different types of investment like Renminbi investment, visit these fund sites today.