Let me go over the different types of investment.

Most Common Investment Types:

1. Common Stock When we talk about stocks, we generally mean common stocks. When you buy a stock, you own a small piece of a company. Stocks can be bought or sold on a stock market and the price can go up and down. More info on stocks can be found on the previous post.

2. Preferred Stock: Preferred stocks are similar to common stocks except they receive dividends before common stocks do. If a company goes bankrupt, preferred shareholders are paid before owners of common stock.

3. Mutual Fund: Mutual fund is a collection of many stocks, bonds and/or cash in one group. Rather than investing in individual stocks you are investing in a pool of securities. It is generally overseen by a professional manager.

4. Exchange-Traded Fund (ETF): ETFs are like Mutual funds because it contains a combination of different underlying stocks, but it is traded like stocks. Some ETFs may focus on the stock indexes like S&P 500 or Dow Jones Industrial Average while others may focus on different sectors like oil, technology, gold, etc.

5. American Depositary Receipt (ADR): This is the kind of investment through which you can own stocks of a foreign company that is traded outside the United States. They are not available for all foreign companies and are traded in the US stock exchange in USD.

6. Option: Option trading is a little more complex than normal trading. When you own a option contract, it gives you the right to buy (call) or sell (put) shares of stock at a specific price. The contract is generally good for a specific amount of time. Option contracts can be bought or sold and are primarily for experienced investors, due to their complexity and risk.

7. Closed-End Fund: A closed-end fund is a publicly traded investment company that raises a fixed amount of capital through an initial public offering (IPO). The fund is then structured, listed and traded like a stock on a stock exchange. The price of a share in a closed-end fund is determined partially by the value of the investments in the fund, and partially by the premium (or discount) placed on it by the market.

8. Real Estate Investment Trust (REIT): These are traded in the stock market like stocks. Real estate investment trust (REIT) allows you to invest in real estate properties and/or mortgages and possibly earn dividends.