Value Line University

Different Investments

There are three basic types of investments, also known as asset classes, all of which we are going to discuss. These investments are stocks, bonds and cash.

You can buy stocks and bonds as individual investments, or you can invest in them by buying mutual funds that own stocks, bonds or a combination of the two. If you invest in cash, you can put money into bank accounts and money market mutual funds or you can buy what are known as cash equivalents: US Treasury bills, Certificates of Deposit and similar investments.

While you may not think of bank accounts as investments because they currently pay such a low rate of interest, technically any time you use money to make more money, you are investing. On the other hand, stocks and stock mutual funds have been the more profitable investments over time.