Types of Investments

Within each of these broad categories, there are a wide variety of investment options, which are often classified by the way they diversify their assets. For example, a stock fund may invest in U.S. large-cap growth stocks and a bond fund may invest in intermediate-term, investment grade government securities.

The equity markets are volatile, but not all stocks are equally volatile. Fixed income investing entails credit risk and interest rate risk. When interest rates rise, bond prices generally fall.