Investment is an act of using money to work, grow, start or expand a businesses or projects or even the purchase of an asset with a single goal which is to increase income and increasing capital.

Bear in mind that an investment is oriented towards predicting future returns, thus it carries some degree of risk.

There is two type of Investment: -

  1. Growth Investment

  2. Defensive Investment


Both has its own distinct characteristic, risk and benefits too. Once we understand the difference between these two types then we will be able to piece it together a mix that would fit our personal goal and risk tolerance.

Growth Investment

Growth Investment are most suitable for long term investors, because an investor should be able to withstand the markets ups and downs which will always happen due to FUNDAMENTAL and SENTIMENTAL reasons which we will cover in the coming chapters.

There are many types of Growth Investment: -

  1. Stock Market – Shares

  2. Property

  3. Derivative Trade

  4. Mutual Fund

  5. Cryptocurrencies

Stock Market – Shares

Shares are considered growth investment because its ability to grow the value of our initial investment over a period. It is a well known and simple type of investment.

What happens when we purchase a stock is that we are buying an ownership share in a public listed company – such as Air Asia, Sapura and Genting.

When we buy a stock, we expect that the price to go up so we can then sell it for profit, we may also receive dividends, which is a portion of the company’s profit paid out in yearly basis.

Of course, there is this risk of the value of the share to depreciate and in that case, we will lose our money thus, this investment is more suited for long term investors is because the price of the share can be volatile from day to day due to its SENTIMENTAL and FUNDAMENTAL reasons and only investor who could withstand these ups and downs will make the maximum profit.

In Malaysia – Bursa Malaysia provides the platform for us to trade share in which we will work with brokers from Investment Banks.

More details on these can be obtained from:


Property is also considered as growth investment because the pricing of the property – house, land or shop lots can rise significantly over a period.

However just like shares, property can also depreciate in value and carries a substantial amount of risk.

Derivative Trade

A derivative is a financial security with value that depends upon or derived from an underlying asset or it can also be group of assets as a benchmark. The derivative itself is a contract between two or more parties and the derivative derives its price from the fluctuation in the underlying asset.

An example of derivative trading is a Contract for Difference (CFD). CFD trading enables us to speculate on the rising and falling prices of the fast-moving global financial market such as currencies, commodities and indices.

Mutual Fund

A mutual fund is a pool of many investors money that is invested broadly in number of companies. It can be managed actively or passively. Usually an actively managed fund has fund manager who picks companies and other investments in which he would like to put the money. They try to beat the market by choosing investment that will provide the best return whereas passively managed fund is managed by simply tracking major market index like FBMKLCI-EA or even Dow Jones Industrial.

Some mutual funds invest only in stocks, other only in bonds and some even mix both. Bear in mind that mutual fund also carries the same risk as stocks and bonds, depending on what they are invested in, but the risk in mutual fund is way lower because the investments are inherently diversified.

Crypto Currencies

Crypto currencies are fairly new investment option. The most famous example of crypto currencies is Bitcoin and Ethereum but there are countless others. It is a digital currency that do not have any government backing. You will be able to buy and sell them on crypto currency exchange.

Crypto currency usually have a wild fluctuation which makes them a very risky investment.

Defensive Investment

Defensive Investment are more focused on consistently generating income, rather than growing and it has lower risk than the growth investment.

A defensive investment strategy is a conservative method of portfolio allocation and management aimed at minimizing the risk of losing principal, such strategies are meant to protect investors against significant losses from major market downturns.

There are a few types of Defensive Investment: -

  1. Cash

  2. Bonds

  3. Annuity

  4. Retirement Plan


Cash investment includes everyday bank accounts, high interest saving account and fixed deposit (ASB). They typically carry the lowest potential returns then all the other investment types.

Even though they offer a very minimal capital growth, they can deliver regular income and can play and important role in protecting and reducing the risk in our investment portfolio.


Buying a bond literally means we are lending money to an entity, usually this is a government or business entity. There are two types of bonds – Corporate bonds issued by companies and municipal bond is a debt security issued by a state, municipality or county to finance its capital expenditures.

When we are buying a bond, we are loaning money to the issuer in exchange for a set number of interest payments over a predetermined period. At the end of that period, the bond reaches its maturity date, and the full amount of your original investment is returned to you.


An annuity is a financial contract that you have with an insurance company. You purchase the contract for a specific amount of money, either through a lump sum or periodic payments. In exchange, the insurer agrees to pay you a set amount on a recurring basis.

Depending on the type of annuity you buy, you may begin receiving payments immediately or defer them to a later date. Typically, annuity benefits are payable until your death, but some plans only allow you to receive payments for a fixed amount of time.

While annuities are fairly low risk, they are not high growth. They make a good supplement to retirement savings, rather than an integral source of funding.

Retirement Plan

There are several types of retirement plans. Workplace retirement plans, sponsored by your employer, which is KWSP.

There are also many private companies/insurances that provide retirement plans such as Citibank’s – Private Retirement Scheme, AXA retirement plan schemes and so on.

The risk is very minimal, and the investment money are backed u by banks and Insurance companies.

In conclusion there are a lot of types of investment to choose from, some are perfect or beginners and some require more knowledge and experience. Each Investment offers a different level of risk and reward.

Bottom Line

The best way to pick or consider an investment is to first know your level of knowledge, your capital amount and the desired goal you would like to archive.

Investing Tips: A financial advisor helps you put together an investing plan that will utilize several above types of investment. Monest Sdn Bhd educate and train people to first understand the market, second analysing the market and finally how to make profit from the market.

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