Investing Guide

Category: Business

Time is money so we need to think before investing. Where can you invest your money ? We have three basic fundamental asset classes. 1) stocks 2) bonds 3) cash stocks are Ownership in a corporation.Bonds are Corporate and government debt must be repaid.cash is Checking, savings accounts,Money market accounts,CDs,US Treasury Bills. Stocks work on Capital gain/loss Optional dividends.Bond work on Maturity date, principle,Capital gain/loss,Interest rate. There are two types of stocks.one is common stock and second is preferred stock. convertible is a part of preferred stock. There are three types of bonds.Corporate, Federal Government,Municipal bonds. debenture is a part corporate bonds.Treasury Bonds (T- Bonds, Treasuries) is a part of Federal Government bonds.General obligation and Revenue are part of Municipal bonds. Risk can be defined as standard deviation of returns.We can have risk in form of stocks, bonds and cash. Your investment objective and Your tolerance for risk deside What percent of your money should be in each asset class? Asset allocation is the single biggest determinate of portfolio results so choose wisely. Always remeber Rule-of-thumb is "%stock = 100 - age". Good luck !