ArchieTaylor
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pm | | Investment account (11th Apr 23 at 10:17am UTC) | Quote Reply | An investment account is maintained with such financial institutions as banks, brokerage houses, or even insurance companies. The main purpose of this account is capital preservation and growth, as well as fixed-interest profit through long-term deposits in the asset portfolio.
In general, "investing" means a proactive use of assets in a very broad definition - such as patents, trademarks, rare wines or gold coins, but also small businesses, real estate and antiques. In this regard, the investment account contains fewer physical assets: cash, stocks, bonds, and mutual funds. The basic investment objective remains the same – to buy the asset and hold it for the long term, and to sell it at some point in the future when the asset's value is cheaper. Depending on the asset you have decided to invest in, you need to evaluate your investment as a long-term process as you will have to wait for the particular asset to appreciate in value.
Investment Account Features
Before opening an investment account, you should consider whether or not this type of financial service is best for your risk/return. Furthermore, liquidity preferences embody your goal. Investment accounts are usually maintained with long-term goals. Traditionally, the long term is considered to be 7 years or more, but this number should not be the primary determinant when deciding whether or not to open an investment account. This banking service is often used when there is a specific event in your life that requires a higher income, such as a wedding. For example, if you are sending your child to college, buying a house, or approaching retirement.
Since one of the main determinants of the investment account is its long-term nature, you should be ready to face another attribute of it - liquidity. Any financial instrument has less liquidity compared to cash in your checking or savings account. Additionally, this type of deposit usually comes with higher transaction costs in case you want to access the cash sooner than a specific time specified in the agreement between you and the financial institution.
https://www.confiduss.com/en/banks/account/investment/ | |
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