When the company does well financially, the value of your stock rises. Instead of being issued by banks, however, bonds are issued by the Government. When you look for a mutual fund to invest in, choose a broker that is well established and has a proven track record. First consider bonds. Stocks are another vehicle for long term investments. You do not have to invest in risky stocks or ventures.
The important thing is to do your research before investing your money for long term gain. A fund manager typically decides how the money will be invested. You can easily invest your money in ways that are very safe, which will show a decent return over a long period of time. If you aren’t quite ready to take the risks involved with mutual funds or stocks, at the very least invest in bonds that are guaranteed by the Government Stocks, of course, are even riskier than Mutual funds. If you are ready to invest money for a future event, such as retirement or a child’s college education, you have several options. Mutual funds are also relatively safe.
Mutual funds are a bit riskier than bonds. Shares of stocks are essentially shares of ownership in the company you are investing in. All you need to do is find a reputable, qualified broker who handles mutual funds, and he or she will invest your money, along with other client’s money. However, if a company is doing poorly, your stock value drops. Bond’s are similar to Certificates of Deposit. Depending on the type of bonds that you buy, your initial investment may double over a specific period of time.
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