"No matter where you read it, or who said it, no matter if i have said it, BELIEVE NOTHING,
unless it agrees with your own reasons and your own common sense!!"
-Buddha
If you are veteran investor, most probably you'll agree with above quote. But if you are novice or newbie those lines should be your Mantra!!
Before we start this topic, I would like to make one thing clear I have written this blog keeping Investors in mind and not the Speculators (but you guys can enjoy too ;-)!! [always remember what Buddha said, (do your own analysis, before jumping into any conclusion), even in the investment market.]
So who are Speculators? "anybody who feels they can beat the market.", if you have this notion, "i'll buy when market goes down and sell when its high" then you are a speculator. So million dollar question remains who are investors then? Investors are those folks who thinks for long term investment gain and also who has done their homework by analyzing the company. Just like Benjamin Graham (Warren Buffet's Guru) puts in " Investor is one who invests after thorough analysis and in those investments which promises safety of principal and an adequate return."
I don't want to get into much details today, hence I'll just write about the few important types of investment options. They are arranged from LEAST risky to MOST risky types. [ if you see hyperlink, then that will lead you to detailed page about those investment options.]
1.Government issued bonds: These types of bonds are issued by the government or government's entity. Known to be the safest investment options as its backed by total faith and credit of the US government and few are even adjusted inflation . Even general public are allowed to buy these bonds. Annual reward rate ranges from 2-4%.
2.Savings Accounts/CD: They are provided by local banks, most convenient way of investment even though they are not backed by total faith of government but are insured by the federal government up-to $250,000/depositor. Annual reward rate ranges from 2-4.5%.
3.Corporate Bonds: Just like government bonds, but issued by corporates. At the time when company files for bankruptcy, you'll have the first priority on the property claim.(Share holders comes LAST). Annual reward rate ranges from 4-5%.
4. Mutual Funds: The fund managers (one who head particular mutual fund) collects the pool of money from small investors and then invests them into diversified stocks, bonds or into money market securities. Because of diversification, risk is slightly minimized than Stock Annual reward rate ranges from 4-5%.
5. Share of Stock: The method of owing a company without much hassle. If you are investing in the stock, it literally means you are buying a part of that company. Hence please choose your company (stock) responsibly, if your company if financially stable and has growth prospect you'll benefit from it, if not then your hard earned money might turn into ashes in matter of second. Annual reward rate ranges from INFINITY% (both direction)...but generally 7-10%
Also view Investment in One Page
unless it agrees with your own reasons and your own common sense!!"
-Buddha
If you are veteran investor, most probably you'll agree with above quote. But if you are novice or newbie those lines should be your Mantra!!
Before we start this topic, I would like to make one thing clear I have written this blog keeping Investors in mind and not the Speculators (but you guys can enjoy too ;-)!! [always remember what Buddha said, (do your own analysis, before jumping into any conclusion), even in the investment market.]
So who are Speculators? "anybody who feels they can beat the market.", if you have this notion, "i'll buy when market goes down and sell when its high" then you are a speculator. So million dollar question remains who are investors then? Investors are those folks who thinks for long term investment gain and also who has done their homework by analyzing the company. Just like Benjamin Graham (Warren Buffet's Guru) puts in " Investor is one who invests after thorough analysis and in those investments which promises safety of principal and an adequate return."
I don't want to get into much details today, hence I'll just write about the few important types of investment options. They are arranged from LEAST risky to MOST risky types. [ if you see hyperlink, then that will lead you to detailed page about those investment options.]
1.Government issued bonds: These types of bonds are issued by the government or government's entity. Known to be the safest investment options as its backed by total faith and credit of the US government and few are even adjusted inflation . Even general public are allowed to buy these bonds. Annual reward rate ranges from 2-4%.
2.Savings Accounts/CD: They are provided by local banks, most convenient way of investment even though they are not backed by total faith of government but are insured by the federal government up-to $250,000/depositor. Annual reward rate ranges from 2-4.5%.
3.Corporate Bonds: Just like government bonds, but issued by corporates. At the time when company files for bankruptcy, you'll have the first priority on the property claim.(Share holders comes LAST). Annual reward rate ranges from 4-5%.
4. Mutual Funds: The fund managers (one who head particular mutual fund) collects the pool of money from small investors and then invests them into diversified stocks, bonds or into money market securities. Because of diversification, risk is slightly minimized than Stock Annual reward rate ranges from 4-5%.
5. Share of Stock: The method of owing a company without much hassle. If you are investing in the stock, it literally means you are buying a part of that company. Hence please choose your company (stock) responsibly, if your company if financially stable and has growth prospect you'll benefit from it, if not then your hard earned money might turn into ashes in matter of second. Annual reward rate ranges from INFINITY% (both direction)...but generally 7-10%
Also view Investment in One Page
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