Generally, there are five types of assets the average investor is likely to own in their lifetime:
- Common stocks – ownership of businesses
- Preferred stocks – special types of stock that often pay high dividends but have limited upside
- Bonds – corporate bonds, municipal bonds, savings bonds, U.S. government treasuries, etc.
- Money markets – highly liquid funds that are designed to protect your purchasing power; considered to be a cash equivalent
- Real estate investment trusts or REITs – a special type of company designation that allows no taxation at the company level provided more than 90% of earnings are paid out to the shareholders. The assets are often invested in a variety of real estate projects and properties.
- Mutual funds including exchange-traded funds, index funds, and actively managed funds.
