How finance folk use it
In finance, a security is a type of financial asset that can be traded. These are generally categorized into 3 types:
- Debt – these include bonds and Treasury bills
- Equity – these are mostly stocks
- Derivatives – these include futures and options
Is it good or bad?
Securities take up a huge part of the investment landscape. Managed funds such as Unit Investment Trust Funds (UITFs) and mutual funds put the money pooled from investors into securities, and you can also buy securities individually.
These assets fit different risk profiles, depending on the specific product. You can find something that matches you, even if you’re conservative, moderate or aggressive. Each type will have its own characteristics, including the potential for returns on your investment.
Remember, though, that all types of securities come with some level of risk.
What it means for you
Securities are probably the most commonly available type of investment product. You can do that directly (by purchasing the securities) or indirectly (by putting your money in a managed fund).