'Money: It's Personal' — Types of investments

SAN ANTONIO – Money gifted during the holidays and income tax season means some people have extra funds to use for things like home repairs and vacations, but what if you're looking to invest?

If you've come across some extra money lately or are just looking to invest, you may start looking into the stock market to grow your finances, and with apps such as Stash, Vault and Stockpile, it has never been easier.

But investments are like candy: There are thousands of options, and some have sweeter returns than others.

The first thing you should consider is what type of investment is right for you.

There are stocks, which grant you shares of ownership of a company; treasury securities, which are a way of lending money to the federal government; and U.S. savings bonds, which are investments endorsed by the federal government.

Sometimes, companies will even pay dividends to shareholders.

Each investment possesses its own risk. However, with some risk comes sweeter rewards. Your earning potential is higher when the investment is a greater risk.

And while treasury securities are backed by the government, that doesn't mean you're protected from loss on any other investments.

There are ways to reduce your risk, though, such as diversifying your holdings. That means putting your money in a variety of investments.  

To learn more about the different types of investments, click here.

“Money: It’s Personal” is a new series on KSAT’s News at 9 that breaks down personal finance topics. If you have a suggestion on what types of topics to explain, click here.

About the Authors: