How to Invest Your MoneyWritten by John Mussi
Think carefully on how to invest your money because if you make wrong decisions it could cost you dearly. There are many ways in which to invest your money and as such seeking advice of a professional would be a very wise move. The information below will help give you a better understanding of some key elements of managing money:Savings: Your "savings" are usually put into safest places or products that allow you access to your money at any time. Examples include savings accounts, checking accounts, and certificates of deposit. Most smart investors put enough money in a savings product to cover an emergency, like sudden unemployment. Some make sure they have up to 6 months of their income in savings so that they know it will absolutely be there for them when they need it. Investing: When you "invest," you have a greater chance of losing your money than when you "save." You could lose your "principal," which is amount you've invested. That’s true even if you purchase your investments through a bank. But when you invest, you also have opportunity to earn more money than when you save. All investments involve taking on risk. It’s important that you go into any investment in stocks, bonds or mutual funds with a full understanding that you could lose some or all of your money in any one investment. Diversification:
| | What is a Mutual Fund?Written by John Mussi
Ever wondered what is a mutual fund? A mutual fund is a pool of money run by a professional or group of professionals called “investment adviser.” A mutual fund is a company that pools money from many investors and invests money in stocks, bonds, short-term money-market instruments, other securities or assets, or some combination of these investments. The combined holdings mutual fund owns are known as its portfolio. Each share represents an investor's proportionate ownership of fund's holdings and income those holdings generate. Because it is sometimes hard for investors to become experts on various businesses for example, what are best steel, automobile, or telephone companies, investors often depend on professionals who are trained to investigate companies and recommend companies that are likely to succeed. In a managed mutual fund, after investigating prospects of many companies, fund's investment adviser will pick stocks or bonds of companies and put them into a fund. Investors can buy shares of fund, and their shares rise or fall in value as values of stocks and bonds in fund rise and fall.
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