Investment models are frameworks that help investors make decisions about where to allocate their money. These models analyze various factors, such as market trends, economic indicators, and individual asset performance, to predict potential returns. Common types of investment models include the Capital Asset Pricing Model (CAPM) and Discounted Cash Flow (DCF) analysis, each offering different approaches to valuing investments. By using investment models, investors can assess risk and identify opportunities in the market. These models can be applied to various asset classes, including stocks, bonds, and real estate, enabling investors to create diversified portfolios tailored to their financial goals.