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- Basics of Investing - Home
Official website of Basics of Investing. This website is devoted to teaching you exactly how to invest successfully from the ground up.
- Investing Introduction
There are many ways and many reasons to invest your money. If you are like the majority of Americans who currently invest, are looking for beginner investments, or are thinking about investing in the near future, you probably are already familiar with a few of these terms, but not all of them, or not very well.
- What is a Stock?
A stock is a tiny amount of ownership in a large business. Generally, if the business is doing well, then the stock will be worth more and more money, and it can even pay you some money back if it does well enough.
- What is a Bond?
Bonds are a basically a loan made to the company or government that sells it. In return, you can collect interest on it twice a year and it is paid back in full it at the end of its life.
- What is a fund?
A fund can be a collection of many different things, put together to make the risk of investing much smaller. For the most safety, for instance, it could be made up of lots of different types of Government bonds and a small amount of interest-earning cash.
- What is Cash?
The word "Cash" is used here meaning any form of money that can be withdrawn quickly, such as money in a checking or savings account. It could even be Gold or in other traded commodities, that have a standard trading rate.
- What are Annuities?
Annuities are the result of insuring a fund to prosper. An insurance company, such a Metlife, New York life, or Hartford, will set up it’s own fund in-house and guarantee it to grow
- What is Tax Free Investing
In case you've heard about Tax free or Tax Deferred investments, I’ll cover this area quickly here as well, although they are just variations on the Bonds and Funds we spoke of in the earlier chapters.
- Types of Investments
Below are most of the other common types of investments available to investors today.
- Investing Strategies
So you want the very best investing advice there is to be had, eh? You've come to the right place. -And we are not being egotistical in saying so, we promise. Building on what we've learned on the last section, (Investment types) our investing advice will now show you how to use those major investment vehicles in your investing strategy very wisely.
- Establish Your Goals
You know them better than We do. Think hard about what you want to achieve, in the long run, financially.
- Decide you Time Horizon
Once your goals are established, aiming for a deadline is also very important. Write these down beside your goals on the same page.
- Are Tax Advantages Right
Tax-advantaged accounts are among the best long term investments, considering that they grow tax-free then whole time. But of course they can't be had by everyone, so how do you know when it's right for you?
- Determine Risk Tolerance
Risk tolerance is just a fancy phrase meaning how much stress you feel from fluctuations in any of your investments.
- Self or Pro Managed
Now that you more specifically know what you want, it's time to decide how you want your accounts to be managed. Today's investors have exactly three options on this step.
- Diversify Allocate Assets
The ability to properly diversify your funds, and your whole portfolio as well, is the single most important step in creating both safety and growth.
- Decide on Investment Vehicle
Let's assume for now that you chose for your portfolio to be allocated with 60% in stocks, 30% in Bonds, and 10% in cash. That's a good start, now which investment vehicles to buy in order to fill those ranks? Let's take each pie slice at a time.
- Importance Market Timing
The simple fact is no one can know 100% for sure when it is the proper time to get out of a stock. Those highly invested in Technology at the turn of the century were clearly devastated by their decision, and this is precisely why you should diversify.
- Stay Invested
This step is pretty self-explanatory, because time is your #1 ally in investing... Jumping from one investment to another is the most destructive downfall that has hurt long-term investors throughout the years.
- Periodic Rebalancing Reallocation
This final step in our investing advice is what keeps your investment earning safely, the way you intended it to, year in and year out.
- How do Forward Contracts Work
Below is the definition of a forward contract price, formula, and example of how a forward contract is done. This is not forward contracts basics.
- Options
An option is a contract to buy or sell a specific financial product officially known as the option's underlying instrument, underlying interest, or underlying security.
- Option Assignments
An option assignment is the sale (in the case of a call option) or purchase (in the case of a put option) of an underlying instrument such as a stock, an index, a treasury security or currency, pursuant to an exercise tendered to the Options Clearing Corporation or OCC.
- Options Glossary
Below is a glossary of terms for options and glossary of options strategy. An option is the right to buy or sell a particular commodity or security at a certain price on or before a particular date.
- Value of Options Glossary
Below are options glossary of terms related to the value of an option. See also the general glossary of options strategy.
- Uses of Options
Below is an illustration of the most obvious use of options. There are many uses of options but most people use options as illustrated below.
- Contact Us
Thank you for contacting the Investing Basics website team. We will be happy to answer any questions you have on the subject of Beginner Investing, especially if we have not already answered it here on this website.
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