Key takeaways
The purpose of investing is to make a profit.
You can invest in stocks, ETFs, REITs, stock options, etc.
Investing is risky, and you should consider your own risk tolerance before investing.
Investing is the buying of assets with the aim of earning a return. There are various types of assets, and each investor needs to make their own choices.
You can choose one or multiple assets to invest in. Everyone wishes to gain, but that hope doesn't necessarily come true. All investments carry a risk of loss. The choice of investment varieties requires a trade-off between returns and risks. Generally speaking, the higher the potential return, the greater the risk.
So, on moomoo, what assets can investors with FUTU US accounts invest in? The following are some types of investments varieties.
Stocks
Stocks represent a company's ownership, and many people hope to share in the profits of the company's growth and gain long-term asset appreciation by buying stocks. On moomoo, you can trade US stocks, HK stocks and China A-shares through Futu Inc., a registered broker.
However, stock prices can be very volatile and can cause your assets to depreciate or appreciate in a short time. Many factors affect stock prices, including but not limited to company performance, economic trends, and market sentiment.
ETFs
Exchange-Traded Funds (ETFs) are a type of exchange-traded products that offers investors a way to pool their money in a fund that makes investments in stocks, bonds, or other assets and, in return, to receive an interest in that investment pool. Compared to a single asset investment, ETFs are more helpful for diversification.
REITs
Buying a property is generally seen as a relatively stable investment, and you can often benefit from living in or renting out whether the property's market value rises or falls. For those who can't afford to buy real estate, there are financial instruments called real estate investment trusts (REITs). The companies which operate the REITs try to profit from real estate, and owning some of their shares after they list on the exchange is a way to share the potential benefits.
IPO Subscriptions
An Initial Public Offering (IPO) refers to the first time a newly listed company sells its shares to the public via a stock exchange.
When a company goes public on the New York Stock Exchange or Nasdaq, investors can subscribe for part of the companies' shares via moomoo. Investors with allotted shares will gain if the new shares rise after the listing; otherwise, investors will lose if the new shares fall.
Stock Options
A stock option is a contract that gives its holder the right to buy or sell a stock at a certain price on or before an agreed upon date. Many investors use stock options for hedging, short-term directional trading, etc. It is worth noting that a single option investment usually has high leverage, which means high risk.
Warrant/CBBCs(Callable Bull/Bear Contracts)
If you are interested in the Hong Kong market, you can trade some unique investment varieties on the Hong Kong Stock Exchange, such as warrants and CBBCs.
A warrant is essentially an option, a leveraged instrument. The buyer is given the right to buy or sell the underlying asset at a certain price before the expiration, so far, the warrants have been settled in cash.
A CBBC is a structured product that tracks the performance of an underlying asset with leverage.
The above are the main investment varieties that US brokerage account users on moomoo can invest in. Before investing, you need to figure out how much effort you are willing to pay and how much risk you may withstand. Once you have determined your investment risk tolerance and objectives, you can consider investing some of your money in one or more assets based on your own situation.
Disclosure:
Moomoo is a professional trading app offered by Moomoo Inc. In the U.S., investment products
and services on Moomoo are offered by Futu Inc., Member FINRA/SIPC.
Any illustrations, scenarios, or specific securities referenced herein are strictly for illustrative
purposes. Past investment performance does not guarantee future results. Investing involves risk
and the potential to lose principal.
Foreign securities are subject to interest rate, currency exchange rate, economic, and political risks.
Diversification is an investment strategy that can help manage risk within your portfolio, but it does not guarantee profits or protect against loss in declining markets.
Options trading entails significant risk and is not appropriate for all investors. Certain complex options strategies carry additional risk. Before trading options, please read Characteristics and Risks of Standardized Options -
https://www.theocc.com/Company-Information/Documents-and-Archives/Options-Disclosure-Document.
Before investing in an ETF, you should read both its summary prospectus and its full prospectus, which provide detailed information on the ETF’s investment objective, principal investment strategies, risks, costs, and historical performance (if any). You can find prospectuses on the websites of the financial firms that sponsor a particular ETF, as well as through your broker.
Risks of the REITs are similar to those associated with direct ownership of real estate, such as changes in real estate values and property taxes, interest rates, cash flow of underlying real estate assets, supply and demand, and the management skill and creditworthiness of the issuer.
