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Stock certificates certify how much of a corporation you own.
Investing is putting your money to work for you. Does financial security mean that you need to save for your children's future education, a vacation, or even retirement? Are you looking for short or long term investments? There are three broad types of investments from which you can choose to build a portfolio.
Stocks are an ownership share in a corporation. As a shareholder you make a profit when the company makes a profit. As part owner of a company you are entitled to vote on important issues like should there be more stock issued or who should be elected to the board of directors.
Bonds are a loan that pays interest over a period of time. They help to raise funds for schools, repair roads and build factories. As a bondholder you will receive a steady income over a fixed term. When the bond matures the principal amount is repaid.
Types of Mutual Funds
Stock funds also called equity funds, invest in stocks
Bond funds invest in government or coporate bonds
Money Market funds make short term investments to keep their share value fixed at $1
Mutual Funds are a collection of stocks and bonds. They are purchased by a company that manages the funds with investment objectives. A mutual fund will include between fifty to one hundred different stocks, bonds and other options. You have easy access to your money that can be converted to cash quickly.
Before making any buying or selling decision research the company profile so that you can have a perspective on your investment.
Article by: St. Louis Public Library staff