Investing sounds way more complicated than it actually needs to be. Most people think you need to be a finance nerd, glued to stock charts all day, or secretly rich to get started. You don’t. What you do need is a basic understanding of the different ways you can invest — because not all investments work the same, and not all of them make sense for every person. That’s where this comes in: a simple ranking for long-term investors, built around The StockRake Score: a way to help you see the landscape more clearly before you dive in.
Some options are aggressive and exciting. Some are slow and boring but steady. Some are great if you want to be hands-off, and others only make sense if you actually enjoy digging into numbers. This list breaks down the most common types of investments people use, what they’re actually good for, and where the real risks and rewards show up in everyday life — without the finance-speak or polished textbook tone.
Think of this less like “expert advice” and more like someone walking you through the terrain so you don’t walk in blind.
1. Growth Stocks
Overview
In the investing world, growth stocks are kind of like the sports cars of the market. They’re exciting, fast-moving, and built around the idea that they’ll grow a lot — sometimes a lot more than the average company. These are often names you recognize, especially in tech. Think Nvidia, Apple, Amazon, Google. But growth stocks aren’t limited to tech alone; any company that’s expanding quickly and reinvesting heavily into itself can fall into this category.
One of the defining traits of growth stocks is that they usually don’t pay dividends, at least not early on. Instead of handing profits back to shareholders, these companies pour that money into hiring, research, new products, expansion, or acquisitions. The goal is to grow faster today so they can be much bigger tomorrow.
That reinvestment-first mindset is what makes growth stocks appealing — and also what makes them volatile. You’re betting that the company’s future will be much bigger than its present.
Who Are They Good For?
Growth stocks tend to work best for people who are willing to put in some time and tolerate some emotional ups and downs. If you’re picking individual growth stocks, you really do need to understand the business: what it does, how it makes money, what its competition looks like, and whether its growth story actually makes sense.
They’re also better suited for investors with a higher risk tolerance or a longer time horizon. Growth stocks can swing wildly in the short term, but over three to five years (or longer), those swings often smooth out. If you panic when your portfolio drops 20% in a bad year, growth stocks might stress you out more than they’re worth.
Risks
The main risk with growth stocks is valuation. Investors often pay a premium for companies they believe will dominate the future. That means the stock price can get far ahead of the company’s actual earnings.
When markets turn sour — during recessions, bear markets, or periods of rising interest rates — growth stocks are often hit hardest. Prices can fall fast, sometimes dramatically. A company that was “the future” last year can suddenly feel very uncool.
Popularity is fragile. Sentiment can flip quickly.
That said, despite the volatility, growth stocks have historically produced some of the strongest long-term returns out there.
Rewards
Nearly every mega-company you know today started as a growth stock. Alphabet. Amazon. Apple. Microsoft. The payoff for identifying a real winner early can be enormous.
There’s technically no ceiling on how much a successful growth company can grow. That’s what makes this category so appealing. You’re taking more risk, but the upside is massive if things go right.
Where to get them
You can buy growth stocks through most major brokerages, either individually or through growth-focused funds and ETFs.
Also Read: How to Spot A Turnaround Stock Before Wall Street Notices 2026
2. Stock Funds
Overview
A stock fund — either a mutual fund or an ETF — is basically a bundle of stocks packaged together. Instead of picking one company, you own dozens or even hundreds at once. These funds are often built around a theme or category, like U.S. stocks, large companies, small companies, or a specific sector.
A professional company manages the fund and charges a fee for doing so, though many index funds today are extremely cheap.
Who Are They Good For?
Stock funds are ideal for people who want exposure to the stock market but don’t want to spend hours researching individual companies. They’re also great if you want to be aggressive and growth-oriented without turning investing into a second job.
You still get stock market upside, but with far less effort and usually less stress.
Risks
Even though stock funds are diversified, they can still move a lot. In a bad year, a stock fund might drop 20–30%. In a great year, it might gain that much or more.
If the fund focuses on a narrow area — say, a single industry — risk increases. A chemicals-only fund, for example, might be heavily affected by oil prices or regulation. That kind of concentration can amplify both gains and losses.
Broad funds, like S&P 500 index funds, spread your money across hundreds of companies, which reduces risk significantly compared to owning just a few stocks.
Rewards
One of the biggest advantages of stock funds is consistency. You’re not betting everything on one company’s success. Some holdings will underperform, some will do great, and over time those average out.
A broadly diversified fund gives you exposure to high-growth companies and stable ones at the same time. You capture the overall market return instead of trying to beat it.
Because you own so many companies, returns tend to be smoother than individual stocks. You’re trading a bit of upside for a lot more stability — a trade most long-term investors are happy to make.
Where to get them
Available at almost any brokerage, including retirement accounts and taxable accounts.
3. Bond Funds
Overview
Bond funds are collections of bonds bundled together inside a mutual fund or ETF. Bonds themselves are basically loans. When you buy a bond, you’re lending money to a government or company, and in return they promise to pay you interest and eventually give your money back.
Bond funds can hold many types of bonds: government bonds, corporate bonds, municipal bonds, short-term, long-term, low-risk, or higher-risk. They’re usually categorized based on those traits.
Who Are They Good For?
Bond funds are useful for investors who want income and stability without having to buy individual bonds, which can be expensive and complicated. Since individual bonds often cost $1,000 or more, funds make bond investing much more accessible.
They’re also helpful for investors who want to reduce volatility in their portfolio, especially as they get closer to retirement.
Risks
Bonds are generally safer than stocks, but they’re not risk-free. Bond funds can go down in value, especially when interest rates rise. When new bonds pay higher interest, older ones become less attractive.
Credit risk also matters. Government bonds are usually very safe, especially U.S. Treasuries. Corporate bonds range from relatively safe to quite risky, depending on the company.
Rewards
The main appeal of bond funds is stability. They tend to fluctuate much less than stock funds and provide steady income.
Returns are lower — usually in the 4–5% range long-term, and sometimes less — but the tradeoff is peace of mind. Holding many bonds across many issuers also reduces the damage if one borrower defaults.
Where to get them
Bond funds are widely available at major brokerages and inside retirement accounts.
4. Dividend Stocks
Overview
If growth stocks are sports cars, dividend stocks are more like reliable sedans. They’re not flashy, but they get the job done consistently.
A dividend stock pays you cash on a regular basis, usually quarterly. These companies tend to be older, more established businesses that don’t need to reinvest every dollar to grow.
Real estate investment trusts (REITs) are a popular type of dividend-paying investment, especially for income-focused investors.
Who Are They Good For?
Dividend stocks appeal to long-term investors who like stability and income. They’re especially popular with retirees or anyone who wants cash flow without selling investments.
They also tend to be less volatile than growth stocks, which can make them easier to hold emotionally.
Risks
Dividend stocks still move with the market and can fall during downturns. And while dividends feel reliable, they’re not guaranteed. If a company runs into trouble, it can reduce or eliminate its dividend — and that often causes the stock price to drop fast.
That said, dividend-paying companies are usually more mature and financially stable than high-growth startups.
Rewards
The big draw is income. Many dividend stocks yield 3–4% annually, sometimes more. Even better, strong companies often raise their dividends over time. That means your income can grow year after year.
Some elite companies, known as Dividend Aristocrats, have raised their payouts every year for 25+ years. That kind of consistency is rare.
Total returns may not match explosive growth stocks, but they can still be very solid — especially when you reinvest dividends or hold long term.
Where to get them
You can buy individual dividend stocks or use dividend-focused ETFs and mutual funds.
5. Value stocks
Overview
When markets get expensive, many investors start looking for value. Value stocks are companies that appear cheap based on metrics like the price-to-earnings ratio.
These companies often aren’t flashy. They may be boring, temporarily unpopular, or just overlooked. But they generate real profits and trade at lower prices compared to their earnings.
Who Are They Good For?
Value stocks are often attractive to more cautious investors. They tend to perform better when interest rates are rising and can offer more downside protection.
Because they’re already priced cheaply, there’s often less room for disappointment.
Risks
Value stocks usually fall less during market downturns, but they can still fall. Sometimes a stock is “cheap” for a reason — declining business, weak management, or shrinking relevance.
Rewards
When market sentiment shifts, value stocks can suddenly come back into favor and rise quickly. You get the benefit of buying low and watching valuations normalize.
Many value stocks also pay dividends, adding another layer of return. For investors who want reasonable growth without extreme swings, value stocks can be a solid middle ground.
Where to get them
Available through individual stocks or value-focused ETFs and mutual funds.
6. Target-Date Funds
Overview
Target-date funds are designed for people who don’t want to manage investments themselves. You choose a retirement year — like 2050 or 2060 — and the fund handles the rest.
Early on, the fund holds mostly stocks. As the target year gets closer, it gradually shifts toward bonds and safer assets. This gradual shift is called the “glide path.”
Different fund providers use different glide paths, so two funds with the same target year can behave very differently.
Where To Get Them
They’re extremely common in workplace retirement plans like 401(k)s, but you can also buy them on your own.
Risks
Target-date funds carry the same risks as whatever they invest in. Early on, that means stock-like volatility. Later, returns decline as bonds take over.
They also tend to underperform pure stock portfolios over the long run because safety increases over time.
Expense ratios vary a lot, so cost matters. Some excellent target-date funds charge under 0.2% annually.
Rewards
They’re simple, hands-off, and surprisingly effective. You get automatic diversification, rebalancing, and age-appropriate risk management.
For many people, they’re “good enough” — and that’s actually a compliment.
7. Real Estate
Overview
Real estate has long been considered one of the strongest long-term investments, largely because it allows you to use leverage — borrowing money to grow your returns. You can control a large asset with a relatively small upfront investment.
But real estate usually pays off over long periods, not overnight.
Who Is This Good For?
Real estate works well for people who want hands-on involvement and don’t mind some work. Being a landlord isn’t always passive. There are tenants, repairs, and unexpected issues.
That said, there are major tax advantages, and owning property gives you real control over your investment.
Risks
Leverage cuts both ways. Borrowing magnifies gains but also losses. If a property sits vacant or needs major repairs, you still owe the mortgage.
Real estate is also illiquid. You can’t sell part of a house easily, and selling takes time and money.
Rewards
Done well, real estate can be incredibly powerful. Rental income, appreciation, tax benefits, and eventual mortgage payoff can create long-term wealth and stability.
Once a property is paid off, cash flow becomes much more predictable — which is why many retirees like rental income.
Where to buy real estate
Through direct property purchases, REITs, or real estate platforms.
8. Small-Cap Stocks
Overview
Small-cap stocks represent smaller companies with big potential. These are often earlier-stage businesses that haven’t yet become household names.
Many legendary companies started as small caps. Amazon is the classic example.
Who Are They Good For?
Small-cap investing suits people who can handle volatility and are willing to do research. These stocks can swing wildly, and information is often limited.
They’re best for investors with strong stomachs and long time horizons.
Risks
Small companies have fewer resources, weaker brands, and less access to capital. They’re more vulnerable to economic stress.
Because of their growth potential, investors often overpay for them, which makes downturns even harsher.
Rewards
The upside is enormous. Finding a true winner early can lead to decades of strong returns — sometimes 20%+ annually over long stretches.
That kind of payoff is rare, but it’s why investors keep looking.
Where to get them
Available via individual stocks or small-cap ETFs.
9. Robo-Advisor Portfolios
Overview
A robo-advisor automates investing for you. You deposit money, answer a few questions about goals and risk tolerance, and the platform builds and manages a portfolio for you.
Most robo-advisors use low-cost ETFs and automatically rebalance your investments over time.
You pay a small management fee, usually around 0.25% per year, plus fund expenses.
Who Are They Good For?
Robo-advisors are great if you want investing handled for you. You don’t need deep knowledge, time, or interest.
You can choose aggressive, moderate, or conservative portfolios. Some even let you hold mostly cash if you want.
Risks
The risk depends entirely on what you own. Stock-heavy portfolios fluctuate more. Cash-heavy portfolios risk losing purchasing power to inflation.
Robo-advisors usually aim for balance, which means smoother returns but slightly lower long-term growth.
Rewards
They offer diversification, automation, and discipline — all things that help real investors succeed. Returns can be strong if your portfolio is stock-heavy and your timeline is long.
Where to get them
Available through platforms like Wealthfront, Betterment, and others.
10. Roth IRA
Overview
A Roth IRA is one of the most powerful retirement tools available. It lets your money grow tax-free and lets you withdraw it tax-free in retirement. That combination is hard to beat.
You contribute money you’ve already paid taxes on, and from there, all future growth belongs to you.
Who Are They Good For?
Anyone with earned income can benefit, especially younger investors. There are income limits, but higher earners can often use a backdoor Roth strategy.
Risks
A Roth IRA itself isn’t an investment — it’s a container. The risk depends on what you put inside it.
You could invest aggressively in stocks or conservatively with CDs. An IRA CD is extremely safe but may struggle to beat inflation.
Rewards
The real reward is flexibility and tax freedom. You can invest in stocks, funds, or other assets and never owe taxes on the growth.
In retirement, tax-free income gives you more control over your finances. You can also pass Roth assets to heirs tax-free, which makes it a powerful estate planning tool.
Conclusion
Look, investing isn’t glamorous. It’s not a guaranteed shortcut to becoming a millionaire overnight, and the world of stocks, funds, and real estate can feel overwhelming at first. The truth is, there’s no perfect investment. Some years your growth stocks will soar, some years they’ll tank. Bonds won’t make you rich, but they’ll keep you from losing sleep. Dividend stocks will pay you, but maybe not enough to retire on their own.
The point of The StockRake Score isn’t to hand you a magic formula — it’s to give you a realistic, honest map of what your options look like. It’s a way to see which investments fit your style, your timeline, and your comfort with risk. Some people thrive on aggressive growth. Others just want steady, reliable income and less drama. And that’s okay — there’s no single “right” choice.
Investing long-term is more about consistency, patience, and knowing yourself than chasing the next hot stock. Start small, diversify, and don’t panic when markets wobble. Over time, even modest, steady investments tend to grow more than you expect.
At the end of the day, the smartest move you can make is just to start — even imperfectly. Learn as you go, adjust when you need to, and let your money work quietly in the background while you focus on living your life. That’s the real win.
Frequently Asked Questions (FAQs)
Q. What is the StockRake Score?
Ans: The StockRake Score is a simple way to rank different types of investments for long-term investors. It looks at potential returns, risk, and how hands-on you need to be, giving you a clearer picture of what might work best for your goals. Think of it as a quick guide, not a magic formula.
Q. Do I have to follow the StockRake Score exactly?
Ans: Nope. It’s meant as a reference to help you understand your options. Everyone’s situation is different — risk tolerance, time horizon, and personal goals all matter. Use it to make more informed choices, but don’t treat it as one-size-fits-all advice.
Q. Can I use the StockRake Score for retirement planning?
Ans: Absolutely. It’s especially useful for long-term planning because it looks at stability, growth, and income potential. Pair it with tools like Roth IRAs, 401(k)s, or target-date funds, and you’ll have a clearer strategy for retirement.
Q. What type of investor is this guide for?
Ans: It’s mostly for long-term investors who want to see the big picture without getting lost in every stock chart. Whether you’re hands-on or prefer a more passive approach, this guide helps you weigh the risks and rewards of different investments.
Q. Are there any risks in following the StockRake Score?
Ans: Yes — like any investing strategy, nothing is risk-free. Stocks can drop in value, bonds can underperform, and even real estate can have hiccups. The StockRake Score helps you understand relative risk, but it can’t eliminate it.
