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Article #317: Personal Finance - Most Common Investment Plans

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Fifty years ago, the average worker -Mid-Cap stocks, lie between the
didn't need to worry about saving for his large-cap and small-cap risk range
retirement. If he stayed with the same Bonds:
company for 20, 25 or 30 years, he was Basically an IOU from a company or
guaranteed a pension, in addition to a government, bonds are a relatively safe
monthly social security check form the investment. Bonds are issued as a way for
United States government, and medical corporations and government agencies to
benefits under Medicare. Still, those raise money quickly. Bonds come with a
same workers generally saved about 10% of guarantee that the purchaser will get
their paychecks for a rainy day, leaving back their original investment, with a
many with a tidy retirement fund. set amount of interest at a specific
Today's workers aren't offered those same date. These fixed-income investments come
retirement benefits, yet, many fail to in several categories, or grades:
put even 5% of their annual salary into a -AAA, AA or A offers relatively low risk
401K retirement plan, let alone save -BBB, are medium grade
additional funds on top of that. Today's -Bonds lower than BBB have higher risk of
worker, (no matter how much, or how default
little they make), must become a savvy -Junk Bonds, offer the highest risk, and
investor in order to guarantee a are often worth nothing by their
comfortable future. maturation date
Whether you can put aside $50 a month, or Cash Equivalents:
$500, learning a few investment basics is This is a type of short-term investment
crucial in order to get the best future that is easily converted into cash, such
bang for your current buck. Here are a as Treasury or T-Bills ( a government
few of the most common investment note offering low interest) and money
opportunities available to both the high market accounts, Although a safe
and low-end investor: investment, their return can be rather
Stocks: low.
Stocks, or equities, are a way to invest Mutual Funds:
a small portion of ownership in a This popular investment is a simple way
specific company. The number of shares to expand your investment portfolio, by
that you buy, in proportion to the number allowing investors to pool their money in
available, determines how much of the a collection of stocks, bonds, and cash
company you actually own. Known as the equivalents, in order to make the most
best opportunity for long-range growth, profit at the least risk. The rationality
stocks can be a risky short-term with this type of investment is, if one
investment. fund does poorly, another will make up
There are three types of stocks available for the loss.
for purchase: Investing money wisely takes a little
-Large-cap stocks, from well-established research and experience, but today's
companies options make investing an option for just
-Small-Cap stocks, represent lesser-known about everyone - no matter how much or
companies with fast-growth potential how little they have to invest.






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