Investing 101

Today there are literally thousands of products to invest in, and every salesperson has the next best thing. Just like most topics, investing can be broken down to a common denominator. There are two common denominators in investing. Regardless of the product it is derived from one of two following factors:

  • Own shares of a company with the expectation of share price appreciation and or dividends, or
  • Loan money to an entity and expect timely payment of interest and principal.    

The following chart explains the basics of Own vs. Loan investments.

 

Own

Vs.

Loan

Investor buys shares and becomes an owner

 

Individual Stocks

Growth

Growth & Income (pays a dividend quarterly)

 

Exchange Traded Funds – ETF’s

 

Stocks

 

Stock Mutual Funds – A pool of stocks

Large, Medium, and Small Company’s

International

Emerging Market

Sector or specific

Investor loans money for a fixed rate of return

 

CD’s – FDIC

 

Money Market

 

Checking and Savings Accounts

 

Bonds

Bond Mutual Funds – A pool of bonds

U.S Government

Municipal Government

Corporate

Foreign

 

Fixed Annuity