If you are looking to build a rock-solid portfolio that will allow you a greater degree of financial freedom, you have no doubt considered investing. Investing is one of the best long-term ways to create wealth and diversify your sources of income. With that in mind, here are five types of investments that you should know about for a stronger financial portfolio..

1. Ready to expand your portfolio? Here
are 5 types of investments you should
know about
If you are looking to build a rock-solid portfolio that will allow you a greater degree of
financial freedom, you have no doubt considered investing. Investing is one of the best
long-term ways to create wealth and diversify your sources of income. With that in
mind, here are five types of investments that you should know about for a stronger
financial portfolio.
1. Stocks
A stock is simply a share of ownership in a business. There are three ways you can profit
from stock investing; one way is through dividends. Dividends are your part of profit
that the company you have invested in generates. In addition, your share of the
company itself may increase in value over time, allowing you to sell your shares later
down the line for a profit. In addition, you can profit from the value change applied to
the company’s assets or profits.

2. 2. Bonds
Bonds are similar to stocks, with a few key differences in the way you should approach
them. Purchasing a bond from a company is lending that company money for a period of
time. In exchange for your loan, the company pays you interest until the bond is due.
Your bond is then paid back in full, while you keep the interest paid out to you. There
are a few types of bonds you can invest in; the bonds generally considered the safest are
Treasury bonds. These are bonds issued by the U.S. government and are taxable only at
the federal level (which means you won’t have to pay state taxes on them.)
3. Annuities
Annuities are a popular choice for retirement investing. An annuity is a financial
product that insurance companies sell. If you invest in an annuity, the insurance
company pays you back on a set schedule, usually semi-annualy. The attractive thing
about annuities is their potential for creating a long-term, steady source of income for
retirees. They can also have extremely high starting expenses, making them an unwise
choice for some.
4. Mutual Funds
A mutual fund is a collective pool of money that a collection of investors contributes to.
A fund manager oversees this pool and invests the cash others invest to ensure
maximum profit. Investing in mutual funds has become extremely popular over the
years; you can buy mutual funds much like you would stock in a company, usually
through a broker. Mutual funds have the benefit of reducing transaction costs for the
investor.
5. 401Ks
You may be lucky enough to have a 401K provided for you by your employer. If this is
the case, you may still want to look over your plan to make sure you are getting the
maximum benefit for your investments. There are many resources online that can help
with customizing your 401K to better suit your needs; in general, your 401K is based off
of the date you plan on retiring, so make sure this matches up on your 401K plan.
Edward Schinik has been with the Investment Manager since 2009 and has been with
one Affiliated Investment Manager since 2005.