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Some Common
Investment Plans
Half a century ago, the average worker did not need to worry
about saving money for his retirement. If he stayed with the
same company for two or three decades, he was usually
guaranteed a pension and a monthly social security check from
the United States government. You also had to consider other
things such as the medical benefits available under Medicare.
These workers still tried by saving about 10% of whatever they
earned for a rainy day and this left a lot of them with some
good money with which they could retire.
Most workers nowadays aren’t given the same retirement
benefits and yet they still fail to place at least 5% of what
they earn into a 401k retirement plan, talk less of saving any
funds in addition to that. Today’s worker regardless of how
much or how little he makes, must become a smart investor in
order to guarantee that they benefit from a comfortable
future.
Regardless of whether you keep $50 or $500 aside each month,
it is essential that you learn a few investment basics in
order to make the most of your money. These are a few of the
most common investment opportunities which will be available
to any category of investor.
Stocks:
Stocks, or equities, are a way to invest a small portion of
ownership in a specific company. The number of shares that you
buy, in proportion to the number available, determines how
much of the company you actually own. Known as the best
opportunity for long-range growth, stocks can be a risky
short-term investment.
There are three types of stocks available for purchase:
-Large-cap stocks, from well-established companies
-Small-Cap stocks, represent lesser-known companies with
fast-growth potential
-Mid-Cap stocks, lie between the large-cap and small-cap risk
range
Bonds:
Basically an IOU from a company or government, bonds are a
relatively safe investment. Bonds are issued as a way for
corporations and government agencies to raise money quickly.
Bonds come with a guarantee that the purchaser will get back
their original investment, with a set amount of interest at a
specific date. These fixed-income investments come in several
categories, or grades:
-AAA, AA or A offers relatively low risk
-BBB, are medium grade
-Bonds lower than BBB have higher risk of default
-Junk Bonds, offer the highest risk, and are often worth
nothing by their maturation date
Cash Equivalents:
This is a kind of investment which is short term and can
easily be converted to cash. One example is Treasury otherwise
known as T-Bills. Money market accounts are also a part of
this category and although they are all quite safe forms of
investment, returns on them are rather low.
Mutual Funds:
This is another popular form of investment and it is a very
simple way of expanding your investment portfolio. Investors
pool their money into a collection of stocks, bonds, and cash
equivalents; this allows them to make the most profits at the
lowest risk.
Investing money isn’t as difficult as it seems and with some
little research, you’ll be well on your way to attaining the
desired goals. |
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Savings
Account News and Information -
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07/31
City of Ypsilanti begins three-year energy savings effort
07/31
‘Fund balance’ tops 7%, debt’s headed down
07/31
Two Local Banking Companies Shut Down
07/31
Rates status quo rocks savings returns
07/31
Job change affects retirement savings
07/30
Spotlight on: Santander's loyalty tracker bond
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