Understanding investment: a guide to cash, equities and bonds

Investing in the stock market may be easier than you think – here's how to get started

Understanding investment
(Image credit: Sue Macartney-Snape)

If you’re a beginner, the idea of placing your money into the stock market can be daunting. But in reality, understanding the markets and how to invest in different assets can lead to greater returns and a more sustainable investment over time when compared to keeping all of your money in cash with your bank.

There are three main asset classes – cash, equities (or stocks/shares) and bonds. There are also specialist investments, which can include property funds, currencies and commodities. These require a little more expertise before being considered for an investment portfolio. It’s important to note that all asset classes have different risk/return profiles – which means that they will have different typical levels of returns compared to different levels of risk.

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