11 Types of Investment Strategies Every Beginner Must Know: Choose the Right One for Yourself

When it comes to fundraising, many people may feel that it is a complicated matter full of risks. But in fact, types of investments come in many forms designed to suit different needs and risk levels. Whether you want to hedge risks or increase asset value, there are many options to choose from. This article will introduce you to various types of investments in detail so you can make informed decisions wisely.

11 Types of Investments Commonly Used by Investors

1. Stocks (Stocks) - Ownership rights in a company
2. Bonds (Bonds) - Fixed-interest debt securities
3. Mutual Funds (Mutual Funds) - Pooling large amounts of money for joint investment
4. Exchange-Traded Funds (ETFs) - Mutual funds traded like stocks
5. Certificates of Deposit (CDs) - High-interest savings assets
6. Retirement Plans (Retirement Plans) - Preparing funds for post-retirement life
7. Options (Options) - Rights to buy or sell assets in the future
8. Annuities (Annuities) - Regular payments over a specified period
9. Derivatives (Derivatives) - Financial contracts referencing other assets
10. Commodities (Commodities) - Energy, metals, and agricultural products
11. Hybrid Investments (Hybrid Investments) - Combining multiple investment types

Part 1: Investment Types for Building Stability

1. Stocks - Earning from company growth

Investing in stocks means buying a stake in a company listed on the stock exchange. This type of investment carries some risk but also offers the potential for high returns.

How do you make money from stocks?

There are two main approaches:

Technical analysis: Buy stocks based on price patterns and sell when prices rise to profit from the difference. For example, buy at $200 and sell at $270, earning $70 profit per share.

Fundamental analysis: Study the company’s profits and growth, then wait for the stock price to increase over the long term. Investors read news, financial statements, and analyze financial ratios.

Getting started for beginners:

• Study articles, books, and resources on stock analysis
• Create an investment plan by selecting companies and setting timeframes
• Choose a suitable broker with reasonable fees
• Learn technical and fundamental analysis

2. Bonds - Investing with fixed interest

Bonds are debt securities issued by governments, companies, or organizations to raise funds. Investors receive fixed interest and principal repayment at maturity.

How do you make money from bonds?

There are two income sources:

1. Coupon interest (Coupon): Received periodically. For example, investing 1,000 THB in a 5% bond for 3 years yields 50 THB interest annually.
2. Capital gains from trading: Selling bonds at a higher price than purchase price.

Getting started for beginners:

• Learn about different bond types, such as government bonds, corporate bonds, short-term and long-term bonds
• Understand bond structures, interest rates, and payment methods
• Select bonds aligned with your goals, noting that lower risk usually means lower interest

Part 2: Managed Investment Types for You

3. Mutual Funds - Letting experts manage for you

Mutual funds pool money from many investors to invest collectively. The fund management company handles and decides investments on your behalf.

Advantages of mutual funds:

• Low minimum investment
• Higher returns than bank deposits
• Diverse investment policies (Thai stocks, foreign stocks, gold, real estate)
• Choose according to your risk level

How do you make money?

1. Use funds as a natural savings account
2. Receive returns from diverse investment policies
3. Invest in funds providing steady income (Passive Income)
4. Benefit from tax incentives via SSF or RMF funds

Getting started for beginners:

• Understand fund types (Equity funds, bond funds, mixed funds)
• Choose funds matching your investment goals
• Open an account at a bank or fund management company
• Monitor and adjust your portfolio periodically

4. Exchange-Traded Funds (ETFs) - Real-time traded index funds

ETFs are index mutual funds traded on stock exchanges like stocks, but they track various indices such as stock markets, commodities, or bonds.

Special features of ETFs:

• Trade like stocks with real-time prices
• Highly diversified, holding various assets
• Lower management fees than regular mutual funds

How do you make money?

1. Profits from price differences between buy and sell
2. Dividends from companies in the index

Getting started for beginners:

• Select ETFs based on your investment goals
• Open an investment account with a broker
• Buy your first ETF and regularly review your investment results

Part 3: Investment Types for Steady Income

5. Certificates of Deposit (CDs) - Simplicity and confidence

CDs are special savings accounts paying high interest, but funds must be locked in for a fixed period.

Features of CDs:

• Fixed term (from several months to several years)
• Cannot withdraw early without penalty
• Fixed higher interest than regular savings accounts

How do you make money?

Simply wait until maturity to receive the principal plus accumulated interest.

Getting started for beginners:

• Understand that CDs require locking funds for the agreed period
• Choose a term that suits your needs (common terms are 6 months to 5 years)
• Compare interest rates across banks

6. Retirement Plans - Preparing for post-work life

Retirement plans involve accumulating funds to have sufficient income during retirement.

Calculating retirement savings:

Formula = Annual post-retirement expenses × Expected years of life after retirement

Example: Person A, age 35, wants to retire at 60, expects to live 20 more years, with current expenses of 30,000 THB/month. They should prepare approximately 5,040,000 THB.

Getting started for beginners:

• Set retirement goals and estimate expenses
• Create a savings plan, deciding how much to save monthly
• Choose investment assets (stocks, bonds, ETFs, mutual funds)
• Diversify investments based on age

Part 4: Advanced Investment Types

7. Options - Rights to buy or sell in the future

Options are contracts granting the right to buy or sell assets at a predetermined price in the future.

Main types:

• Call Option (Right to buy): Buy when expecting prices to rise
• Put Option (Right to sell): Sell when expecting prices to fall

Example: SET50 Index at 930 points, you buy a Call Option at 950 points with a premium of 17.1 points (pay 3,420 THB). If prices go up, you profit.

Getting started for beginners:

• Understand terms: Strike Price, Expiration Date, Market Price
• Study how options work through books and online articles
• Choose a broker offering options trading and open an account

⚠️ Important note: Options carry high risk and can result in total loss. Study disclosure documents carefully before investing.

8. Installments - Regular payments

Installments refer to equal payments made over a specified period, such as mortgage payments, car loans, or monthly savings.

Example: Person A and B deposit 30,000 THB annually to save for education, earning 3% annual return over 17 years. How much will they have?

Use future value formulas for installments to calculate accumulated amount.

Getting started for beginners:

• Understand types of installments (Fixed, Variable, Indexed)
• Study how they work
• Choose the type suitable for your goals and risk appetite

9. Derivatives - Advanced investment contracts

Derivatives are financial contracts referencing other assets, traded via futures markets (TFEX).

Types of derivatives:

• Options (Rights to buy/sell)
• Futures (Forward contracts)
• Swaps (Exchange agreements)

How do you make money?

Investors can profit in both rising and falling markets depending on their positions.

Getting started for beginners:

• Learn terminology and basic principles
• Study different derivative types
• Understand high risks involved

⚠️ Derivative instruments can lead to total loss. Study thoroughly before investing.

Part 5: Commodities and Blended Investments

10. Commodities (Commodities) - Energy, metals, and agriculture

Investing in commodities includes energy (oil, gas), metals (gold, silver), and agricultural products.

Example: OPEC announces oil production cut from 22 million barrels to 15 million barrels. As supply decreases, WTI crude rises from $80 to $83.

Advantages of commodity investments:

• Diversification; commodities often have low or negative correlation with stocks and bonds
• Hedge against inflation, as commodity prices tend to rise with inflation

Disadvantages:

• High volatility, among the most traded assets
• Uncertainty from geopolitical factors

Getting started for beginners:

• Study different commodity types
• Understand factors influencing prices
• Choose suitable trading platforms

11. Blended Investment - Building a balanced portfolio

Blended investment combines multiple asset classes to diversify risk and increase income opportunities.

Sample diversified portfolio:

• 40% stocks (growth)
• 30% bonds (fixed income)
• 20% real estate (risk protection)
• 10% commodities (inflation hedge)

How do you make money?

Total return = (Stock return rate × 40%) + (Bond return rate × 30%) + … and so on.

Getting started for beginners:

• Define clear investment goals (long-term, short-term)
• Assess risk tolerance
• Select assets with low correlation
• Monitor and rebalance periodically

Everything You Need to Know Before Investing

🔸 Preparation Steps

1. Set objectives

• Are you investing for daily or monthly profits?
• Are you saving for retirement?
• Are you hedging risks?

2. Assess risk

• What level of risk can you tolerate?
• Do you understand the types of investments?

3. Understand income and expenses

• Study trading fees
• Comprehend expected returns

4. Learn about investment types

• Read articles, books, and research reports
• Learn from experienced investors
• Follow financial news

5. Create a financial plan

• Budget and savings
• Investment duration
• Growth targets

🔸 Risk Management

• Understand risks of each investment type
• Diversify (Diversification) across assets
• Set loss limits (Stop Loss)
• Avoid investing more than you can afford to lose

🔸 Monitoring and Adjustment

• Regularly review investment performance
• Adjust your portfolio according to market conditions
• Avoid impulsive decisions

🔸 Seek Professional Advice

If unsure, consult a financial advisor or investment expert before making decisions.

Summary

Types of investments are diverse and designed to meet different needs. Whether you are a conservative investor, an inflation-hedger, or a growth seeker, there are options available.

The more you study and gain experience, and the clearer your investment plan, the better you can manage risks and diversify your assets effectively.

Remember, investing is a long-term journey that requires patience, knowledge, and a clear plan. Only then can you steadily and sustainably increase your wealth.