Understand Before You Invest
The investment landscape is filled with financial products. Before you invest in a particular product, take the time to understand it, and to assess whether it's really a suitable product for you. Keep in mind that all financial products carry risk, even if it's the risk that a product's financial return may not keep pace with inflation. Types of Financial Products
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Mutual Funds are pools of money invested by an investment company in a number of securities like stocks, bonds, or government securities. Because most mutual funds invest in a large number of securities, they offer investors the benefit of diversification, which can help reduce market risk.
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Stocks are financial instruments that signify an ownership position-referred to as equity-in a corporation.
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Bonds are debt instruments, also considered loans, that an investor makes to a corporation, government, federal agency, or other organization in which the bond holder typically receives the amount of the face value of the bond on a future date, and regular interest payments.
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Systematic Investment Plans are an increasingly rare type of financial product sold almost exclusively to members of the military. They allow you to accumulate shares of a mutual fund indirectly by making small regular monthly payments, but with high first-year costs.
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Annuities are contracts between investors and an insurance company in which the company promises to make periodic payments to the investor, starting immediately or at some future time. If the payments are delayed to the future, you have a deferred annuity. If the payments start immediately, you have an immediate annuity. Annuities come in three types: fixed, variable and equity indexed.
Learn more. Certificates of Deposits are deposits of a fixed sum of money for fixed period of time - six months, one year, five years, or more - and, in exchange, the issuing bank pays you interest, typically at regular intervals.
Learn more. 529 Plans are tax-advantaged programs that help families save for college. There are two types - prepaid-tuition plans and college savings plans.
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Read Frequently Asked
Questions About Saving &
Investing
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