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What is a securities investment?

When a government or company requires money to finance special projects or provide services, it can borrow from lenders or issue securities. An investor can buy these securities hoping to get back profit or income if the investment is successful.

What are securities?

Securities are the certificates or documents that show you have an interest in the capital, assets, property or profits of a company or business. They describe your rights as a shareholder or investor, or a company's obligation to you.

Are there different types of securities?

Yes. Each type of security carries different rights and obligations.

• Equity securities include common or preferred shares, which make the investor a part owner of the company or other issuer of securities. In return, the investment entitles the investor to a portion of the profits.
  
  
• Debt securities include bonds and debentures which make the investor a lender to the issuer or company. Government or government agencies often issue bonds.
  
  
• Mutual fund shares or units are another common type of security. A mutual fund investment enables an investor to pool his or her money together with many other investors. Professional fund managers then invest the money in a wide variety of investments. The original investor does not have to make the investment decisions.

Other types of securities include:

• limited partnerships in real estate or films.
  
• some education savings plans that invest in securities.
  
• oil and gas leases.
  
• options on gold, silver and foreign currency.