For people looking to invest safely, knowing the types of investments is fundamental.
This is because, by evaluating each type, it is possible to compare the prospects for gains and the risks involved.
The fixed income investment appears as an option in this sense, precisely because it presents greater security, while having prospects of good returns.
What is Fixed Income?
Fixed income is a type of investment with more predictable gains and lower risks.
Unlike variable-income investments, fixed income has strictly defined yield rules in advance.
When starting an investment in fixed income, the investor knows the term of the investment and the index used to value the money.
With this, there is the possibility of predicting, at least in parts, the yield that the application will generate.
What do I need to observe when choosing investments?
Many investors ask themselves what is the best investment that can be made.
There is no definitive answer, because several factors must be considered to determine which investment should be chosen by each person.
Fixed income investment, therefore, may or may not be the best type of investment, depending on factors such as investor profile, personal goals, amount available for investment, liquidity, and profitability.
Investor profile
The profile translates how tolerant to risks the person who invests is. Objectively, there are three investor profiles:
- Conservative investor: this type of investor prioritizes low-risk investments and, therefore, with lower returns. The conservative investor seeks security and predictability;
- Moderate investor: the evolution of the conservative profile is the moderate one, which, although it also seeks security, tolerates some risks, even if they are not very big;
- Bold Investor: finally, the bold investor is the one who is more used to the world of investments, willing to tolerate higher risks and, at the same time, with a tendency to have a higher profitability, even in the midst of risks.
Some examples of investments in Fixed Income
Check out, below, the main fixed income investments available in the market:
- Direct Treasury: in this type of investment, the investor lends money to the Government to finance its actions in the areas of education, health and safety, for example. In exchange for this loan, the investor will receive the value invested plus interest;
- CDB: If in the direct treasury the investor lends money to the Government, in the CDB (Bank Deposit Certificate) the loan occurs to financial institutions, which use this money to provide financing and loans;
- LCI and LCA: these two types of investments also work as loans, but this time for the real estate and agricultural sectors, respectively;
- Debentures: Finally, we highlight this investment modality, which consists of bonds from private companies that need to raise funds for these organizations' particular purposes.
Conclusion
You must remember very well that your mother used to tell you that you were not everyone, right? This principle applies especially to the world of investments, that is, there is no point in following a trend or adopting a type of investment just because other people are doing it.
Be critical and know a lot about the subject, seek help from specialized advice if necessary.
