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A Beginners guide to Global Assets

Discover how stocks, bonds, commodities, and more work in the global economy.

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Expanding on Global Assets & How They Work

Now, let’s go deeper into each asset class and how it functions in the Global market.

Stocks (Equities)

What are stocks?

• 
  Stocks represent ownership in a company. When you buy a stock, you own a fraction of that company.
• 
  Example: If you buy Apple (AAPL) stock, you become a part-owner of Apple Inc.

How they work:

• 
  Stocks are traded on stock exchanges like the New York Stock Exchange (NYSE) and Nasdaq.
• 
  Investors make money through:
  ✅ Capital appreciation (Stock price increases)
  ✅ Dividends (Some companies pay regular profits to shareholders)

Who should invest?

• 
  Best for long-term investors looking for growth.
• 
  Higher risk, but higher potential returns.

Bonds (Fixed Income)

What are bonds?

• 
  Bonds are loans that investors give to companies or governments in exchange for periodic interest payments.

How they work:

• 
  When you buy a government bond, you’re lending money to the government.
• 
  When you buy a corporate bond, you’re lending money to a company.
• 
  Bonds pay a fixed interest rate (coupon rate) over time.
• 
  At the maturity date, the investor gets back the original loan amount.

Example

• 
  U.S. Treasury Bonds (T-bonds)
• 
  Corporate bonds from companies like Microsoft

Who should invest?

• 
  Best for conservative investors looking for steady income and lower risk.

Forex (Foreign Exchange Market)

What is Forex?

• 
  The foreign exchange market (Forex) is where currencies are traded 24/7.
• 
  Example: Trading USD/EUR (U.S. Dollar vs. Euro).

How they work

• 
  Forex trading involves buying one currency and selling another.
• 
  Prices change based on economic events, interest rates, and market sentiment.
• 
  Traders use leverage to amplify gains (or losses).

Who should invest?

• 
  Best for experienced traders who understand global economics and risk management.

Commodities (Gold, Oil, Agriculture)

What are commodities?

• 
  Commodities are physical goods that are traded in markets.
• 
  Two main types:
  Hard commodities: Gold, silver, oil.
  Soft commodities: Wheat, coffee, sugar.

How they work:

• 
  Prices depend on supply and demand.
• 
  Example: Oil prices rise when supply decreases or demand increases.
• 
  Investors trade commodities through futures contracts or exchange-traded funds (ETFs).

Who should invest?

• 
  Best for hedging against inflation or diversifying a portfolio.

Cryptocurrency (Bitcoin, Ethereum, etc.)

What are cryptocurrencies?

• 
  Digital currencies secured by blockchain technology.
• 
  Decentralized, meaning no government or bank controls them.

How they work

• 
  People buy crypto on exchanges like Coinbase or Binance.
• 
  Prices fluctuate based on supply, demand, and regulations.
• 
  Some cryptos, like Bitcoin, are seen as “digital gold”.

Who should invest?

• 
  Best for tech-savvy investors who understand volatility.
• 
  High risk, high reward.

Derivatives (Options, Futures, CFDs)

What are derivatives?

• 
  Financial contracts derived from an underlying asset (stocks, commodities, etc.).
• 
  Two main types:
  Hard commodities: Gold, silver, oil.
  Soft commodities: Wheat, coffee, sugar.

Types of derivatives:

• 
  Options: Right (but not obligation) to buy/sell at a set price.
• 
  Futures: Agreement to buy/sell at a set price in the future.
• 
  CFDs: Speculate on price movements without owning the asset.

How they work

• 
  Investors use derivatives to hedge risk or speculate on price changes.
• 
  Example: Buying an oil futures contract to lock in prices.

Who should invest?

• 
  Best for advanced traders looking for leverage and risk management.

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