5 Types of Investments and How to Make an Investment Plan

5 Types of Investments: Over the past few years, there has been a massive jump in the number of people investing their money or wanting to get into investing

Raju Choudhary

5 Types of Investments
5 Types Of Investments

Over the past few years, there has been a massive jump in the number of people investing their money or wanting to get into investing. However, new investors aren’t sure where to start or understand the importance of having an investing plan; here is everything you need to know about both.

Types of Investments

While there are multiple types of investments and investment plans, four of the most popular ones are stocks, bonds, property, and mutual funds.


Stock is most likely the investment you have heard the most about. In simple terms, owning stock is owning a part of a company. When the company does well, your investment increases in value, and vice versa. Any professional trader worth their salt will have various stocks in their portfolio.


Purchasing a bond entails lending money to an entity of some description. That entity will then pay you interest for borrowing the money and the money back: you essentially earn a profit through interest.


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This is not something everyone can afford, but property investment is arguably one of the best forms. Whether you own an apartment block, own undeveloped land, or rent out a property, it is a consistent form of income that allows you to pay off the property and set you up to buy more.

Mutual funds

A mutual fund is a type of investment that is perfect for those who want to invest but don’t know what to invest in. A mutual fund allows you to put your money into a managed investment pool, and a fund manager will then invest it into stocks or bonds that they think will be successful.


One of the newest investment opportunities on the market is cryptocurrency. While people are still very unsure about the future of crypto, several of these currencies are proving to be great investment choices since they do have a future in our world.

Types of Investments

How to make an investment plan

Once you have decided on what you will be investing in, you must create an investment plan. This plan is the path you will follow in your investing journey, hopefully leading to success.


The first thing you need to do is to lay out your goals. You don’t have to be ultra-specific, but you should figure out if you are investing in creating a nest egg in twenty years to generate an immediate income or for another reason.

Understanding your goals from the start is necessary to prevent you from making choices and decisions that don’t directly help your goals and will therefore stop you from taking any unnecessary risks.


Another vital part of your investment plan is figuring out your investment budget. You can decide on a weekly or monthly budget, but always remember the old adage: never invest more than you can afford to lose.

Don’t view this as something to be scared of. Once again, any seasoned investor will tell you where and how you invest your money is far more important than how much you invest. In the long term, $10 invested in a safe opportunity will always be a better idea than $1000 into one with high risk.


Speaking of risk, performing a risk assessment is another vital part of any investment plan. Two factors can influence risk: how much money you invest and how long you plan on investing that money.

For example, suppose you are in your mid-thirties and are investing to help form a retirement nest egg. In that case, you can take a bit more risk as you will be investing smaller amounts of money each month, and there is enough time for your investments to right themselves if there are any dips.


While your goals will help determine your timeline, it is still important to have an investment “schedule.” Investing isn’t just about throwing money everywhere and seeing what sticks. You should try and have control over as much of the process as possible, and how long you keep an investment is part of that control.

Investments Types


Finally, always ensure you keep your portfolio as diverse as possible. A diverse portfolio means having a collection of investments that are all different, such as stocks, bonds, mutual funds, and cryptocurrency, among others.

Diversity is important as it minimizes risk and increases your income options. For example, if your stocks dip, you have your crypto or mutual funds to keep you balanced. On the other end of the spectrum, multiple income streams mean you are still making money elsewhere when one investment is a bit slower.


There must be nothing confusing when investing and creating an investment plan. If you follow the above tips, you can start your investment journey almost immediately and hopefully put yourself on the path to success.

Raju Choudhary

Article by Raju Choudhary Raju has written 810 articles. If you like This post, you can follow CAknowledge on Twitter. Subscribe to CAknowledge feed via RSS or EMAIL to receive instant updates.


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