What are investments?
Via Life Cycle investment, Aegon PPI invests in different types of investments, such as shares and bonds. With Vrij Beleggen (Free investments) you choose from the different types yourself. Below is a brief explanation of our different types of investments.
Shares (commercial values)
A share is a certificate of participation in a company. This means you own a piece of the company. It also means you run an entrepreneurial risk. You participate in any profit made. You also share in the loss. The entire entrepreneurial risk is assumed by the shareholders.
You have no certainty about:
- The future value of the investment;
- The payment to be received (dividend);
If you, as a shareholder, would like your money back you will have to sell your shares at the going rate. The exchange rate is determined at the stock exchange.
Fixed interest values (Bonds)
A bond is a participation in a monetary loan. This is a loan in a company or the national government. Someone who buys a bond receives interest from the issuer of the bonds.
The value of a bond fluctuates during the life of the bond. This is related to the interest rate on the interest rate market. As such, bonds come with investment risks. Most bonds have a fixed term. At the end of the term, the buyer of the bond is paid back the principal sum. There are different types of bonds, such as bonds:
- from emerging markets;
- from high-yield companies;
- with a collateral as security, such as a mortgage.
Property and commodities
Another option is to invest in property and commodities. Property comprises residential homes, offices and shopping centres. Examples of investments in commodities are investments in oil and gold. These investments carry a relatively high risk. The value of these investments can increase rapidly, but also decrease rapidly.
Money market investments are low-risk investments. Money market investments have a short term and a limited exchange rate risk. Examples of this type of investment include short-term deposit accounts and saving funds.