Investments fundamentals from a personal point of view

Investment fundamentals aims to demystify process of using money to make money in other words transform input into output. If you are investing money, you have to be ready for risk of losing your money, and income from them, may rise or fall and investors may get back less than they invested. However, by taking an appropriate level of risk you may have opportunity to earn high long-term returns. Investing, on other hands, can help you to create and preserve your wealth. 

There are have two types of investments, are divide into income assets and growth assets. 

Key decision that you are making during the planning stage is whether you require income growth, or both of them. 

Basic difference between them is that growth assets targeted on long-term period returns in the form of capital growth with less danger, while inflation. And have more volatile returns over the shorter term. Income assets, work for short-term period returns in the form of income, cash investments, bonds and certain equities. Returns that you are getting from income assets are more stable and lower, if compare to Capital Growth, but possible to benefit higher income from holding a higher proportion of income assets. After deciding what suits best for yourself, you are ready start developing investment plan. When you are considering your investment plan, you need to think about number of costs and taxes. Investing is always some costs and charges, less you are spending on it, potential returns will be higher. 

Of the major asset types equities, bonds, properties and cash, equities have the highest potential to get strong returns over the long-term, but still need to remember that equities can be volatile. Go up and go down depending on how company doing well. 

Portfolio is kind of list of all assets you have. 

There always should some rules that you always have to follow to implement successful investing 

Proverb that is known for everyone saying that don't put all your eggs in same basket, that I mean spreading your money across a range of investments is one of the best ways to reduce risk and protect against sudden falls in any particular market, sector, or individual investment. Some successful investments will help to decrease loss of failure or current one. When some investments are nonperforming, other investments can help to even out the ups and downs in portfolio. 

Investments can be managed by two ways-active or passive. Those who using active way defining as active managers, who's role actually to take top-down or a bottom-up approach. Beat the return of market index or benchmark. About passive/index managers they are motivated to closely match the returns of a market index or benchmark. Keep market movements in perspective.