A mutual fund is like a bucket full of multiple different stocks, bonds, securities or a combination that you invest in collectively. When you buy into a mutual fund, you are buying into all of the securities in the fund by making one single investment. It is a great way for instant diversification. Types of Mutual Funds There are stock funds, sector funds, passively-managed, … [Read more...] about What is a Mutual Fund?
What is an Index Fund?
An index fund is a fund that tracks an index, such as the S&P 500, the Nasdaq 100 or the Dow Jones (the 3 most popular American indexes). So what exactly is an index? What is an Index? An index is a representation of a portion of the stock market. Example: The Dow Jones Index is comprised of 30 companies, these are 30 of the largest and most influential companies in … [Read more...] about What is an Index Fund?
What is a Stock?
The stock market can be scary for new investors, but it's not quite as complex as the folks on Wall Street want to pretend it is. This brings us to the most basic question about the stock market: What is a stock? A stock is a share of a public company. A Public Company There a private companies and there are public companies. Private companies are owned by individuals or by … [Read more...] about What is a Stock?
What is an IRA? Roth, Traditional, and More
First off, an IRA (Individual Retirement Arrangement) is NOT an investment. An IRA is a shelter for investments. A tax shelter. In an IRA, you have the options to buy stocks, bonds, mutual funds, money market accounts, CDs, and, in some cases, real estate. The purpose of using an IRA as an investment account to hold all of these securities is simple; the tax breaks. … [Read more...] about What is an IRA? Roth, Traditional, and More