Investing in Stocks: What are all these different types?

I believe stocks to be the most valuable and value creating way to invest. I also believe now is one of the best times we have seen in the past 20 years to get into investing. Sure, the stock market is very panicky right now, but that has only led to very large discounts on great stocks that have not lost their value at all. Before we jump into stocks that are very appealing to me, let me go into some of the different types of stocks and what to expect from each genre of stock.
Growth Stocks – These large sized companies do not pay a dividend, but instead reinvest their earnings into ongoing projects in order to maximize their company growth. A good example of a successful growth stock is Apple (APPL).
Value Stocks – Small to medium sized companies that are trading at less than their actual value based on financial data. Value stocks can reap large growth rates once the market reacts to the appropriate value of the stock’s worth.
Blue Chip Stocks – Blue Chip stocks are large companies that are considered low risk, safe options for a slow growth rate. Blue chips usually offer a modest dividend percentage of the stock price usually ranging in the 1 to 3% range. Large sums of money can stay most safely here when investing with stocks.
Domestic Stocks – Any stock that is home and does its business nationally is considered a domestic stock.
ADR’s – ADR stands for an American Depository Receipt of a stock that is supported by a U.S. bank for the shares that the bank owns in order to transfer all dividend yields from the original countries currency to U.S. dollars. ADR’s are popular and an excellent idea for anyone wanting to gain international stock exposure while being able to have actual realized stock gains in U.S. dollars.Penny Stocks – Any stock that trades at a lower price, usually below $5, and is considered to carry much more risk and experience more volatility than the rest of the market. Penny stocks are usually traded on smaller stock markets such as the AMEX stock exchange, Over the counter bulletin board stock exchange and others. While penny stocks are very risky, the flip side is their quick and high dollar gains which ends up either losing or making you a lot of money.

Shedding light onto the World of Investments

Investing may be one of those words that makes you run in the opposite direction, but investing can be simplified to wisely using your money to work for you. What is meant is that investing allows for you to place your money into something, whether this is stock, bonds, Certificate of Deposits, or many other options we will get to, that will allow it to grow itself over time returning back to you more money than you started out with in the beginning.This is the secret to how the rich maintain their wealth and how you too can retire at an earlier age. But, we must caution you, investing wisely is the only type of investing that you should do.This is just a start, a start on a road to creating money work for you. I will cover the basics of investing and move on towards how to invest. It is important to learn the basics right now before you start investing.Types of Investing:*Stocks - stocks are partial ownerships in a publicly traded company. This is a company that has allowed itself to be bought and sold in small portions, called stocks on a stock market. Stocks can flucuate up or down and can be bought or sold in any whole number amounts. Stocks are considered to carry a higher inherent risk than other types of investing. It is ideal for investors who would like to see gains in their investments with the balance of carrying a higher level of risk of losing their money.*Bonds - Bonds are a more conservative approach to investing that allows for you to give companies a certain amount of money and for this company to pay you back the amount you lended the company plus a percentage of the total amount borrowed by the company. It is ideal for people who do not want to lose their investment money but would like to have a small return on their investment.*Mutual Funds - Mutual Funds are a collection of stocks that are managed by a team of professional stock analysts who choose what company's stocks to buy to add to this mutual fund portfolio. This is considered a medium risk investment. It is ideal for people who are not wanting to have high risk like with stocks, but would like moderate returns on their investments.*Real Estate - Buying real estate for the purpose of an investment allows for investors to have a safe place to keep their investment with a high probability of seeing their investment increase. This type of investment takes time and should not be rushed into until all details and understanding of real estate buying have been diagnosed.To be continued... continue reading other Investing articles by Matt