Should you invest in a government bond? See more investing pictures. Ariel Skelley/Blend Images/Getty Images Liesa Ownby needs a new ride. She is 19, balances college coursework with a part-time job and wants to borrow money to buy a used car. While Ownby feels like this is a feasible plan, local lenders see it differently. To them, Ownby isn't a safe investment. They worry that with her low pay and scant work history, she may default on her loan. In a way, you face the same dilemma as an investor. When you buy stocks or bonds, you're actually loaning money. What guarantee do you have that you'll be paid back? That's where government backing comes in. In many cases, when you invest in a government-supported agency, you receive a payback guarantee. It's known as "full faith and credit" and refers to a government's promise to take responsibility for another entity's debt, should it default. This promise allows a government-backed agency to use a government's credit rating, which … [Read more...] about Are government-backed agencies safe investments?
Start the Countdown With the all the variations in the stock market, how do you know if your investment will be a good one? Check out these Investing Pictures to learn more! Hiroshi Watanabe/Workbook Stock/Getty Images You get a text from your best college buddy saying to call him ASAP. On the phone, he can barely contain his excitement. His brother-in-law works at a popular high-tech company that's about to announce a revolutionary new product. Your friend is an active day trader — someone who buys and sells stocks online — and guarantees that the company's stock will soar on the news. If you invest $1,000 today, your shares will be worth twice that amount by the end of the week. He's going all in. What do you say? With financial investments, there is no reward without risk. The riskiest bets, like short-term investments in a volatile stock market, can bring the greatest rewards, but also stunning losses. The truth is that your friend's "sure thing" is … [Read more...] about 10 Significant Risk Factors When Investing in a Company
Start the Countdown Investment Image Gallery What makes one investment more aggressive than another? See more investment pictures. ©iStockphoto.com/Lee Pettet Many of us have heard financial advisers or 401(k) plan administrators describe an aggressive investment strategy as a good choice for young investors who have time to ride out the ups and downs of the market, while those closer to retirement are encouraged to choose safer, more conservative options. But what makes one investment more "aggressive" than another? The term aggressive investments refers to investments selected for their potential to increase the value of an initial cash outlay; that is, their potential for growth, as opposed to their ability to provide financial stability or predictable dividend income. Along with the prospect of higher returns, aggressive investments also carry a higher-than-average risk of losing some -- or all -- of the money you invest. The dot-com boom of the late 1990s and … [Read more...] about 10 Aggressive Investments
Investing Image Gallery Are there really any investments that are considered risk-free? See more investing pictures. ©iStockphoto.com/Nikada If you've been paying attention to your financial advisers and 401(k) plan administrators, you've probably heard at one time or another that as you approach retirement age, you should move your money from investments designed to provide growth and return on principal to lower-risk investments designed to keep your assets safe when you need them most. But can investments ever be truly risk-free? An investment is essentially any means or strategy employed in the hopes of turning an existing amount of money into a larger amount of money. So an interest-bearing savings account might be considered an investment (just not a very high-return investment), but hiding your cash in a cookie jar would not. Risk can come from factors beyond the control of an individual business or investor, such as political and regulatory issues, the everyday ups … [Read more...] about Can investments be risk-free?
People join real estate investment clubs for many different reasons, such as to get financial and legal advice from professionals, to learn about market trends and to network. Real estate investment clubs come in all shapes and sizes. If you live in an area that doesn’t have the type of club you’re looking for, you can always establish a real estate investment club of your own. You’ll be able to attract people who have the same general goals as you do when it comes to real estate. Before you officially establish a new real estate investment club, it’s important to do your homework. It’s a good idea to check out a few meetings of local clubs so that you can begin to understand how they’re run. Once you’ve become familiar with other real estate investment clubs in your community, you’ll want to think about how your club will be different from them. After you’ve spent some time on coming up with a specific mission for your real estate … [Read more...] about How can you establish a real estate investment club?