Mutual Funds and the Stock Market
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Mutual Funds and the Stock Market |
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Two forms of higher risk savings are mutual funds and the stock market. Both may provide a higher rate of return on your investments than bonds or CD's, but due to fluctuations in the economy, pose a higher risk. You should always discuss all the benefits and risks with your financial advisor before investing in any financial savings plan.
A mutual fund is a company that invests your money in a diversified group of stocks, typically chosen to give a "guaranteed" return of a certain percentage rate on your investment.
There are many types of mutual funds: money market funds, fixed-income funds, balanced funds, growth or equity funds, and specialty funds. To learn more about mutual funds, go to BMO InvestorLine.
Stocks are another way to invest your money for the future. Investing in the stock market can be either a short or long term investment. Due to the daily, sometimes moment-to-moment fluctuations of the market, this can be a very risky investment.
There are two main markets in the U.S., the New York Stock Exchange and the Nasdaq Exchange. Companies trade shares of their stock on these markets to other companies and individuals through brokers. You might buy one share, hundreds of shares, or thousands of shares. Good research and a constant eye on the market as the key to success. A trustworthy broker is also indispensable!
To learn more about the stock market go to the New York Stock Exchange or to Nasdaq and search the information provided there.
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Last modified 06/19/02