Investing is different from saving or trading. Generally investing is associated with putting money away for a long period of time rather than trading stocks on a more regular basis. Investing is riskier than saving money. Savings are sometimes guaranteed but investments are not.

Learning the fundamentals of investing is like learning a new language. Whether discussing stocks, bonds, and other investment vehicles to structures, fixed deposits. The good news is that once you have mastered the language and certain investing basics, you'll better understand how much of this works.

Let's look at the most common types of investments you will encounter: stocks, bonds, mutual funds, and real estate.

Stocks:

Stocks are a type of security that gives stockholders a share of ownership in a company. Stocks also are called “equities.” Without a doubt, owning stocks has been the best way historically to build wealth. Stocks are pretty simple: they're shares of ownership in a specific company. When you own a share of Infosys, for example, you own a tiny piece of that company.

Bonds:

Investing in Bonds has been considered one of the safest ways to make money. A bond is fixed-income security offered by governments and businesses. You lend them money for a set time period and at a fixed interest rate. A bond normally pays back your money plus the interest at the end of the lending period, the maturity date. Bonds and other fixed-income securities have a range of interest rates and risk levels. Many investors use an investment advisor to help them decide which bonds to buy and when to sell.

Mutual Funds:

Mutual funds are baskets of stocks or bonds. They come in all different shapes and sizes, from covering broad stock market indexes to focusing on specific sectors. One of the most popular ways to own stocks and bonds is through mutual funds. Mutual funds offer many benefits to investors, particularly to beginners who are just mastering investing basics. They're pretty easy to understand and allow you to diversify your investments over more companies.

Real Estate:

The world is full of people who are convinced that real estate is the only investment that makes sense. Whether you subscribe to that philosophy or not, there are more ways than ever to add real estate to your portfolio. Yes, you can buy a home for yourself, or properties to rent. There can be a high barrier to entry as the property is expensive.

Investing in a Bad Economy :

It's the nature of the world that sometimes bad things happen. When they happen to your investments or savings, you don't need to panic. Sometimes, you need to take a hit before you can make some money again, and holding on until the recession ends is the best plan.