human
I'm a little confused by all of these different types of investments. Can someone explain them to me?
assistant
Investing is the practice of allocating money for the purpose of earning income and/or capital appreciation over time. There are many different types of investments, such as stocks, bonds, mutual funds, ETFs, annuities, and commodities. Each type of investment has its own set of risks and rewards associated with it. Stocks typically provide higher returns than other types of investments, but also come with more risk due to their volatility. Bonds tend to be less volatile than stocks, but offer lower returns. Mutual funds can give you exposure to a variety of assets at once, while still providing diversification benefits. Annuities are long-term investments that provide guaranteed income in exchange for a lump sum upfront payment. Commodities are physical goods used as inputs in production processes or traded on financial markets.