Knowing how to secure your financial well-being is one of the most important things you will ever need in life. You don’t have to be a genius to do it. You just need to know a few basics, form a plan, and be ready to stick to it. There is no guarantee that you will make money from investments you make. But if you get the facts about saving and investing and follow through with an intelligent plan, you should be able to gain financial security over the years and enjoy the benefits of managing your money. That is where investments have an added advantage over depositing in banks. While banks guarantee a small interest, investments open up opportunities to grow your money in a way that bank deposits can never dream of. Risks are involved and that is where you need a source of information regarding various aspects of investments. To know more take a look at the website http://www.growingsavings.com/.
Many people just like you turn to the markets to help buy a home, send children to college, or build a retirement nest egg. But unlike the banking world, where deposits are guaranteed by federal deposit insurance, the value of stocks, bonds and other securities fluctuates with market conditions. No one can guarantee that you’ll make money from your investments, and they may lose value.
The most common choice for investments are stocks. Stocks are a type of security that gives stockholders a share of ownership in a company. Stocks also are called “equities.” Now the question arises as to why people buy stocks. Investors buy stocks for various reasons. Here are some of them:
Capital appreciation, which occurs when a stock rises in price. Thus by buying a stock when the prices are low and selling it at a higher price, you can make money from stock market fluctuations.
Dividend payments, which come when the company distributes some of its earnings to stockholders. Investing in companies that make profits and are fundamentally strong will pay off in the future as they pay high dividends.
Stocks offer investors the greatest potential for growth (capital appreciation) over the long haul. Investors willing to stick with stocks over long periods of time, say 15 years, generally have been rewarded with strong, positive returns. But stock prices move down as well as up. There’s no guarantee that the company whose stock you hold will grow and do well, so you can lose money you invest in stocks.
A bond is a debt security, similar to an IOU. Borrowers issue bonds to raise money from investors willing to lend them money for a certain amount of time. When you buy a bond, you are lending to the issuer, which may be a government, municipality, or corporation. In return, the issuer promises to pay you a specified rate of interest during the life of the bond and to repay the principal, also known as face value or par value of the bond, when it “matures,” or comes due after a set period of time. Visit http://www.growingsavings.com/ for more information.
