Kenya investing in stocks, bonds, and mutual funds reflects best investment diversification plan.
What do you understand by stock?
The ownership of a portion of a corporation is represented by a security called a stock, sometimes referred to as an equity. As a result, the stockholder is entitled to a share of the corporation's assets and income in proportion to the number of shares they possess. "Shares" are the unit of stock. Most individual investors' portfolios are built on stocks, which are mostly bought and sold on stock exchanges. Government regulations that are designed to shield investors from dishonest acts must be followed in these transactions. They have historically outperformed the majority of other assets over the long term. Most internet stockbrokers offer these investments for sale.
What do you understand by mutual funds?
A corporation that pools money from several investors and invests it in stocks, bonds, or other assets is known as a mutual fund. The portfolio of a fund refers to all of its holdings, whether they are securities, bonds, or other assets. The shares that each investor in the fund owns are a portion of these holdings.
In order to invest in securities such as stocks, bonds, money market instruments, and other assets, mutual funds aggregate the funds from shareholders. Professional money managers run mutual funds, allocating the assets and attempting to generate capital gains or income for the fund's investors. The portfolio of a mutual fund is set up and kept up to date in accordance with the specified investment goals in the prospectus.
What is a bond?
Bonds are tradable assets that are securitized versions of corporate debt issued by businesses. Since bonds historically paid debtholders a fixed interest rate, they are referred to as fixed-income instruments. Interest rates that fluctuate or float are also rather typical today.
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