Investment options
As you put together your portfolio, you'll need to do a little digging into the different types of investments. Here's help making sense of it all.
POINTS TO KNOW
- Most investors divide their portfolios between stocks and bonds, with potentially a small cash portion.
- There are many different types of stocks and bonds that offer various levels of risk and reward.
- In addition to stocks and bonds, there are other kinds of investments that add additional risk and complexity, which may not be right for everyone.
Cash investments
Bond investments
Stock investments
You can own pieces of companies through stocks, giving your portfolio the chance to gain value over time.
Domestic or international?
The United States isn't the only place to find stocks and bonds. You can get even more diversification by looking beyond our borders.
Other kinds of investments
Your portfolio will probably be mostly made up of stock and bond investments, and potentially some cash. But there are other types of assets you might want, depending on your goal and how sophisticated your investment strategy is.
WE'RE HERE FOR YOU
If you'd like some help with your investing decisions, here are a couple of ways you can get the answers you need.
Get an asset allocation recommendation online. You just need to answer some questions about your time frame, risk preferences, and financial situation.
Partner with a Vanguard advisor. If you'd like a professional to manage your portfolio for you, we can do that. Research shows that an advisor who provides professional financial planning, coaching, and portfolio management services can add meaningful value compared to the average investor experience.*
Asset classes: Stocks, bonds & others
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We can custom-develop and implement your financial plan, giving you greater confidence that you're doing all you can to reach your goals.
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From mutual funds and ETFs to stocks and bonds, find all the investments you're looking for, all in one place.
Vanguard perspectives on choosing investments
Read what the head of Vanguard Quantitative Equity Group has to say about managing portfolios that use quantitative, data-driven strategies.
Vanguard experts Ron Reardon and Chuck Riley explain duration and how this measure impacts risk and yield when investing in bonds.
Learn how our credit analysts apply their expertise about bond credit quality to identify securities with the opportunity to earn a good return without taking on undue risk.
Research has shown that adding international stocks and bonds to your portfolio helps reduce overall volatility. Vanguard experts Andrew Patterson and Scott Donaldson explain how this works and how you can go about determining how much to add.
REFERENCE CONTENT
Certificate of deposit (CD)
An insured, interest-bearing deposit that requires the depositor to keep the money invested for a specific period of time or face penalties. Brokered CDs can be traded on the secondary market.
Risk
Usually refers to investment risk, which is a measure of how likely it is that you could lose money in an investment. However, there are other types of risk when it comes to investing.
Portfolio
The sum total of your investments managed toward a specific goal.
Bond
A bond represents a loan made to a corporation or government in exchange for regular interest payments. The bond issuer agrees to pay back the loan by a specific date. Bonds can be traded on the secondary market.
Interest
Income you can receive by investing in bonds or cash investments. The investment's interest rate is specified when it's issued.
Stock
Usually refers to common stock, which is an investment that represents part ownership in a corporation. Each share of stock is a proportional stake in the corporation's assets and profits.
Diversification
The strategy of investing in multiple asset classes and among many securities in an attempt to lower overall investment risk.
Mutual fund
A type of investment that pools shareholder money and invests it in a variety of securities. Each investor owns shares of the fund and can buy or sell these shares at any time. Mutual funds are typically more diversified, low-cost, and convenient than investing in individual securities, and they're professionally managed.
ETF (exchange-traded fund)
A type of investment with characteristics of both mutual funds and individual stocks. ETFs are professionally managed and typically diversified, like mutual funds, but they can be bought and sold at any point during the trading day using straightforward or sophisticated strategies.