| Today investors have a wide range of investment | | | | Furthermore, some investments perform better than |
| choices such as mutual funds, stocks, bonds, real | | | | others in certain situations. For instance, bond prices |
| estate trusts (REITs), commodities, and many more. | | | | usually go down when interest rates go up. |
| But remember every investment has some degree | | | | Successful investors need to know how to keep the |
| of risk. You must understand the risk before | | | | balance. Diversified investment can reduce your risk.o |
| investing. Many investments are not federally insured, | | | | What is my potential earning over time? You should |
| even if you may buy them through a FDIC insured | | | | know what to expect to earn from your investment. |
| bank. Have these questions answer before investing.o | | | | For instance, real estate and stocks generally have |
| How quickly can I get my money back? Some | | | | higher potential growth and earnings over time. Keep |
| investments like Stocks and bonds can be sold at | | | | in mind that there is no guarantee. Some stocks or |
| any time, but you may loose more money than you | | | | real estate may never go up in value.o Are there any |
| initially invest. Other investments like limited | | | | tax advantages? Municipal bonds are exempt from |
| partnerships may not allow you to cash out.o Is my | | | | federal income tax, and U.S. saving bonds are |
| investment diversified? Some investments are riskier | | | | exempt from state and local taxes. Sometimes it |
| than the other. The reward and risk is usually a | | | | may also be exempt from state income tax. |
| trade-off. Greater risks often offer higher rewards. | | | | |