Even in a bad economy people still need to borrow money from credit card companies. Investors can bet against the revolving credit of consumers to get started you can look for mutual funds and exchange traded funds known as ETFs.
Financial service companies can be lumped together so to see the biggest gains of profits it is recommended to invest in individual stocks such as American Express, Discover Card, MasterCard, and Visa.
International Market Growth
One of the major reasons for looking at diversification is that the emerging market growth of credit volume outside of the U.S. has investors taking another look at consumer credit share repurchase programs which give earnings to those who have direct stocks or ETFs in their portfolios.
When it comes to equities associated with finance the residual claim or interest after all liabilities are paid it is important for investors to know the difference between if the liability exceeds assets or if negative equity exists.
For example in the case of a stockholders equity, shareholders funds, or capital the remaining interest in assets of a company will be spread among individual shareholders of common or preferred stock.
Low vs High Risk
The interesting thing about finance and economic is that you are putting your money into a instrument that is expected to gain a profit from careful analysis of the market.
That is why most beginners want the security of knowing the degree of principle is high enough after a specified period of time. The difference with investing in oil and gas exploration is that there is no surety of (ROI) return on investment so it leads to much speculation.
Low risk would be what is known as a fixed income because your receiving payments on a schedule which is what you get from pensions and government bonds.
Credit card debt is unsecured and accumulates with interest and penalties when this happens the consumer may end up paying higher interest rates because of defaulting on the amount of money borrowed.
ETNs and ETFs
The exchange traded note is dependent on the credit rating known as debt securities, so the return you receive is based on the performance of the market. Funds traded on the stock exchange will hold assets such as stocks, commodities, and bonds that have an asset value.
Average working people can get started due to the low cost and tax efficiency. Formally index funds are now actively managed from the authorization of the U.S. Securities and Exchange Commission.
Source: Investing in Credit - Boomberg Businessweek
Disclaimer: This is for informational purposes only and is not meant to give investment advice, it is recommended that you consult an investment broker before putting your money into any stocks.