TANZA NATIONAL TRADE SCHOOL- SENIOR HIGH SCHOOL

ACCOUNTANCY, BUSINESS, & MANAGEMENT

BUSINESS FINANCE
Advantages and Disadvantages of
Different Type of Investment (WEEK
3)
Presented by:
Leader: SALINAS, NINFAH U.
Assistant Leader: FIGUEROA, MADELINE
Members: BANUELOS, JENELYN D.
DE JESUS, RHEA CASSANDRA C.
MONTON, KRIS ANGEL
SOSMEÑIA, JESSA MAE A.
FERNANDEZ, JERARD HANZ P.
FUENTES, DONNA ROSE S.
BALASABAS, ALTHEA
CACCAM, JAMAICA E.
BALAGON, CRYSTAL MAY
ARMONIA, IRISH

Presented to: MRS. MARICEL M. ESCA

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ABM- 12 DAVID RICARDO | GROUP 2
 TANZA NATIONAL TRADE SCHOOL- SENIOR HIGH SCHOOL
ACCOUNTANCY, BUSINESS, & MANAGEMENT

OVERVIEW
This module provides a thorough exploration of various investment
type, with a specific emphasis on advantages and disadvantages of
different type of investment. Investing in different type of investment
have pros and cons, this module aims Investing is an effective way to
put your money to work and potentially build wealth but think wisely by
choosing a type of investment.

LEARNING OBJECTIVES
At the end of this lesson, the students will be able to:
1.Define terms of each investment.
2 .To gain knowledge and understand the advantage and disadvantage
of each Investment.
3. Enjoy and understand the lesson about advantages and
disadvantages of different investment.

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ABM- 12 DAVID RICARDO | GROUP 2
 TANZA NATIONAL TRADE SCHOOL- SENIOR HIGH SCHOOL
ACCOUNTANCY, BUSINESS, & MANAGEMENT

Introduction
Investing is buying stocks and other assets and holding them for
the long term. A long-term investment horizon often uses a passive
investment strategy, meaning there is little active buying and selling
(trading) happening. However, some investors may choose to enter and
exit positions every few years or when their investing strategies tell them
to do so.
Investing is an effective way to put your money to work and
potentially build wealth. Smart investing may allow your money to
outpace inflation and increase in value. The greater growth potential of
investing is primarily due to the power of compounding and the risk-
return tradeoff. Here are the different type of investment and their
advantages and disadvantages.

ADVANTAGES AND DISADVANTAGES OF

DIFFENT TYPE OF INVESTMENT

Mutual Funds
Is the company that pools money for many investors and invests
the money in security such as stocks, bonds, and short-term debt.

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ABM- 12 DAVID RICARDO | GROUP 2
 TANZA NATIONAL TRADE SCHOOL- SENIOR HIGH SCHOOL
ACCOUNTANCY, BUSINESS, & MANAGEMENT

ADVANTAGES
• Professional management
• Diversification
• Liquidity
• Tax efficiency

DISADVANTAGES
• Lock in period
• Fluctuating returns
• Dilution of funds

Fixed Deposit
It’s a financial instrument offered by banks that gives investors a
higher interest rate than a regular savings account until the maturity
date.

ADVANTAGES
• Guaranteed return on investment
• Easy to understand and manage
• Low risks compared to stocks

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ABM- 12 DAVID RICARDO | GROUP 2
 TANZA NATIONAL TRADE SCHOOL- SENIOR HIGH SCHOOL
ACCOUNTANCY, BUSINESS, & MANAGEMENT

DISADVANTAGES
• Limited returns
• Penalty for early withdrawal
• No capital appreciation

Bonds
It is a loan you make to a company in exchange for income over a
fixed period of time.

ADVANTAGES
• Receive income through the interest payments
• Hold the bond to maturity and get all your principal back
• You can profit if you resell the bond at a higher price

DISADVANTAGES
• Bonds payout lower returns than stocks
• Companies can default on your bonds
• Bonds yield can fall

Stocks
There are units of ownership in a company.

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ABM- 12 DAVID RICARDO | GROUP 2
 TANZA NATIONAL TRADE SCHOOL- SENIOR HIGH SCHOOL
ACCOUNTANCY, BUSINESS, & MANAGEMENT

ADVANTAGES
• Easy to buy
• Don’t need a lot of money to start investing
• Income from price appreciation and dividends

DISADVANTAGES
• Competing with institution and professional investors
• Taxes on profitable stock sales
• Takes time to research

Real Estate
It is a piece of land or a building that is bought with the intention of
producing a financial return, as oppose to personal use or occupation by
the owner.

ADVANTAGES
• Real Estate can be easier to understand
• Real estate is improvable
• Real estate is a hedge against inflation

DISADVANTAGES
• Has a higher transaction cost
• Requires management and maintenance
• Creates liabilities

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ABM- 12 DAVID RICARDO | GROUP 2
 TANZA NATIONAL TRADE SCHOOL- SENIOR HIGH SCHOOL
ACCOUNTANCY, BUSINESS, & MANAGEMENT

Commodities
These are called alternative investments that are publicly traded
tangible assets, agricultural products and natural resources used in
commerce and trade.

ADVANTAGES
• They smooth volatility
• Inflation protection
• Supporting economic growth

DISADVANTAGES
• High volatility
• Damage to the environment
• Investing in raw material

Forex
The buying of one currency while simultaneously selling another.

ADVANTAGES
• Low transaction cost
• High liquidity
• Ability to generate quick returns

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ABM- 12 DAVID RICARDO | GROUP 2
 TANZA NATIONAL TRADE SCHOOL- SENIOR HIGH SCHOOL
ACCOUNTANCY, BUSINESS, & MANAGEMENT

DISADVANTAGES
• High volatility
• Difficulty in predicting price movement
• High leverage

Crypto
It is a digital currency designed to work as a medium of exchange
though a computer network.

ADVANTAGES
• Potential of high returns
• Protection from debased currencies and the threat of rising inflation
• Potential diversification

DISADVANTAGES
• High volatility and potential for large losses
• Poor store of value and limited acceptance
• Unregulated and unbacked

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ABM- 12 DAVID RICARDO | GROUP 2
 TANZA NATIONAL TRADE SCHOOL- SENIOR HIGH SCHOOL
ACCOUNTANCY, BUSINESS, & MANAGEMENT

Insurance
It is a financial safety net, helping you and your love ones recover
after something bad happens

ADVANTAGES
• Financial security
• Encouragement to savings
• Stability of living standard

DISADVANTAGES
• Terms and conditions
• Not for all people
• Potential Crime

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ABM- 12 DAVID RICARDO | GROUP 2
 TANZA NATIONAL TRADE SCHOOL- SENIOR HIGH SCHOOL
ACCOUNTANCY, BUSINESS, & MANAGEMENT

Conclusion
There are various investment options available in financial
planning, each with its unique characteristics and potential benefits.
Mutual funds offer diversification and professional management at a
relatively low cost, but may not perform as well as actively managed
funds. Fixed deposits provide a fixed rate of return over a specified
period, but yields are generally lower than those offered by other
investments. Bonds allow investors to lend money to issuers in
exchange for regular interest payments, but prices can fluctuate based
on changes in credit ratings. Stocks represent ownership in companies
and have the potential high returns through growth and dividends, but
also come with higher risks due to market volatility. Real estate investing
offers tax benefits, rental income, and potential appreciation in value, but
requires significant upfront capital and ongoing management costs.
Commodities are influenced by supply and demand factors and can
protect against inflation, but prices can be highly volatile. Forex and
crypto investing involve buying and selling digital currencies or foreign
exchange, which can be highly volatile, but are highly speculative and
subject to extreme price swings. Insurance provides financial protection
against unexpected events, offering peace of mind and financial security,
but premiums can be expensive and coverage may not fully cover all
potential losses.

REFERENCES :
https://www.motilaloswal.com/blog-details/what-are-forex-trading-
advantages-and-disadvantages/20917

https://aspiringyouths.com/advantages-disadvantages/fixed-deposit-
investment/

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ABM- 12 DAVID RICARDO | GROUP 2
 TANZA NATIONAL TRADE SCHOOL- SENIOR HIGH SCHOOL
ACCOUNTANCY, BUSINESS, & MANAGEMENT

https://images.app.goo.gl/Cr8mXcpikAAS7eqWA

https://www.aplustopper.com/advantages-and-disadvantages-of-
insurance/

https://cleartax.in/s/advantages-disadvantages-mutual-funds

https://www.google.com/imgres?imgurl=https%3A%2F
%2Fwww.thebalancemoney.com%2Fthmb
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%2Fx%2Fim%2Fm4%2F2#imgrc=sOprU19VirAPXM

https://americanfundsretirement.retire.americanfunds.com/planning/
what-is-asset-allocation/stocks-and-bonds.html#:~:text=Stocks%20offer
%20an%20opportunity%20for,you’re%20diversifying%20your
%20portfolio.

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ABM- 12 DAVID RICARDO | GROUP 2