An Investment Vehicle is a product used by investors to gain positive returns. Investment vehicles can be low risk, such as certificates of deposit (CDs) or bonds, or they can carry a greater degree of risk, such as stocks, options, and futures. Other types of investment vehicles include annuities; collectibles, such as art or coins; mutual funds; and exchange-traded funds (ETFs).The type of investment vehicle that an investor chooses should be based on their financial goals, time horizon for investing, and tolerance for risk.For example, someone who is saving for retirement may choose to invest in a mix of CDs and stocks in order to balance safety with the potential for growth. On the other hand, an investor with a shorter time horizon who is looking to make a quick profit may put all their money into penny stocks or cryptocurrency. It is important to do your research before investing in any type of security so that you understand the risks involved.Investment vehicles offer different benefits depending on what they are invested in.For example, bonds tend to provide stability and income while stocks have the potential for capital gains. Some investments also offer tax advantages – like 401(k)s which grow tax-deferred – which can help you save more money over time.
