Introduction
The investing environment may be quite dynamic and constantly changing. However, over the long run, individuals who take the time to comprehend the fundamental ideas and the many asset classes stand to benefit greatly. A person who wants to invest has many places where they can put their money. It is crucial to consider the different investment kinds thoroughly. Stocks, bonds, and cash equivalents are the three main categories into which investments are often divided. Within each category, there are several distinct kinds of investments. The purpose of this work was to inform readers of the current investing options.
Bonds
An investment reflecting a loan from a lender to a borrower is called a bond. An example of a government bond is a treasury bill; a convertible bond represents a corporate one (CFI Team, 2022). In a typical bond, a private sector company agency may be the issuer, and in exchange for borrowing the lenderâs funds, the lender will pay the lender a specified interest rate. In companies that utilize bonds to fund operations, acquisitions, or other initiatives, bond rates are often determined by interest rates (Ammer et al., 2019). As a result, they are actively traded when the Central Bank raises interest rates or when there is a monetary stimulus phase.
Stocks
Shares of stock provide shareholders the opportunity to profit from a companyâs growth through payments and price rises in the stock. The most widely used ones are common, growth, and preferred stocks (Smith et al., 2022). In the case of bankruptcy, shareholders would be entitled to certain assets, but they do not really own them (Siegel, 2021). Ordinary stock owners have the ability to vote at shareholders’ meetings. Investors with preferred shares do not have voting rights, but they get investment returns before common shareholders.
Cash Equivalents
Treasury bills issued by the US government, bank deposits, bankersâ admissions, corporate papers, and other money market products are examples of financial assets. These financial products frequently feature minimal risk, a market with a high level of liquidity, and short maturities. Other examples of cash equivalents are commercial papers, treasury notes, and money market funds (Examples of cash equivalents, n.d.). Accountants may also use a company’s capability to generate future cash flows to judge whether it would be wise to invest in a particular company because it shows how a corporation can pay its obligations over a short period of time.
About Planning and Writing the Report
One should constantly remind oneself of one thing when preparing and writing an informative report for an uneducated and uninformed receiver, especially if the topic is multifaceted, like accounting and finance. This thing is the fact that âan uninformed audience is one that does not share the same set of knowledge as the presenterâ (How to present, 2020, para. 17). The report begins with a smooth introduction to the topic of investments with attention-grabbing statements that these are very profitable if the individual with money knows how to manage them.
Conclusion
The introduction also contains a short list of sub-topics, for the client to get the first insight. The client explores the topic for the first time, so only the basic, traditional investing methods are included, described, and explained in the educative report. Complex accounting and financial terminology are missing for the same reason. Specific information is taken from academic scientifically-produced sources and topic-specific and reputable websites.
References
Ammer, J., Claessens, S., Tabova, A., & Wroblewski, C. (2019). Home country interest rates and international investment in US bonds. Journal of International Money and Finance, 95, 212-227. Web.
CFI Team (2022). Bonds. CFI. Web.
Examples of cash equivalents. (n.d.). FMX Fiscal Management. Web.
How to present to different types of audiences. (2020). Stinson Design. Web.
Siegel, J. J. (2021). Stocks for the long run: The definitive guide to financial market returns & long-term investment strategies. McGraw-Hill Education.
Smith, T., Murry, C., & Clarine, S. (2022). Types of stocks. Investopedia. Web.