My investment primary drill down continues.  Yesterday’s post set the stage for making the purchase selection using your investment objective and associated style.

Mapping Investment types to styles

As a broad generalization most types of investments align with one of the four styles I listed in yesterdays post.  This is not an absolute correlation and is really only a guide.

The most important step in the process is research and I will go into that in a little more detail in tommorows post.

Growth –  equities (IPO’s, business’ in emerging markets, innovation focused companies, companies expanding through takeovers and purchases) ; Mutual Funds (prospectus indicates they are growth focused, probably with a lot of the afformentioned equities) ; ETF’s (same comment as mutual funds); Start up (i.e., venture capital) ; Property to improve and flip or just hold and flip.

All of these have varying risk profiles but in general would be classified high.

Income – Guaranteed Investment Certificates ; most Bonds (government being most secure paying lowest income) ; Equities (dividend paying, most growth equities reinvest their capital) ; Investment Trust (usually dispersed as interest) ; ETF’s and Mutual Funds ( income focused and usually contain the aforementioned type of investments.; Income property (i.e. bought to hold and rent out)

Again each investment has it’s own risk profile, but these are generally low to medium risk

Value – Equity (as a generalization the valuation per share exceeds  the price per share) ; Property – any property sold for less than it is worth, to be resold at a later date at a higher value, e.g., homes, antiques, collectables and so on.

Market Timing – all of the above types.  The investment itself is not really the point here as this is not a buy and hold, buy and earn or buy and improve but rather just a gamble the price will rise in a short period.

Disclaimer – I should have noted this yesterday , these styles are not all inclusive just the most common and have many variations and more esoteric versions (like hedging) This is just a basic primer after all.

Coming tommorow

Doing the research.