(d) Hybrid Funds
It is mutual fund that invests in both bonds & stocks or in convertible securities. It can be further divided into balanced funds, asset allocation funds, target date funds & lifestyle funds.
(9) Stocks or Equities
It is one of the highly volatile & yet best retirement investment options that represent the ownership in the stock issuing corporation. It is usually representing the residual assets of a company left after the discharge of secured & unsecured debts.
Some of the benefits of stock investment include capital appreciation that often outperforms other investments, dividend payments, diversity, liquidity, & voting rights. However, the presence of excess volatility can wipe out your entire investment value.
You just need to open a demat & trading account at the most popular & honest equity broker to start trading stocks online. You can also buy shares of a company through dividend reinvestment plan (DRIP).
Some of the reasons for which a company issues stocks include paying off debt, launching new products & services, expanding into new markets, & building new facilities. Stocks can be classified through number of ways like:
On the basis of Shareholding rights:
(a) Common Stocks
These stocks provide shareholders the right to vote at its shareholder meetings & to receive dividends.
(b) Preferred Stocks
These stocks don’t provide voting rights, although, they can receive dividends before common stockholders & have priority over common stockholders (in case of bankruptcy).
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