Investment Time Horizon

Your investment time horizon is the length of time until you need to sell your investment. This is an important concept when trying to decide what kind of investments you should have in your portfolio. An investor who doesn�t need their money for decades can own a riskier portfolio compared to someone who needs the […]

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Target Retirement Funds

Target retirement funds are mutual funds that are geared toward investors that have a specific target retirement date.� The idea behind these funds is they change their asset allocation over time to meet the needs of the investor. If your planned retirement date is far away (say 25 years) then the fund will have a […]

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Bull Markets and Bear Markets

A bull market is basically a stock market index that is trending upwards for a decent length of time.� There is no exact definition for how much the market has to go up or how long the upward movement should last for a bull market to occur but usually when most investors are feeling �happy� […]

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Timing The Market

Timing the market or market timing occurs when an investor or fund manager makes a decision to buy or sell an investment in anticipation of that investment going up or down in value.� This can occur on a broad scale where a fund manager might alter the ratio of stocks to bonds in his fund […]

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Investment Diversification

Investment diversification means that an investor should buy investments that are not concentrated into one company, industry, country or even asset class. You have undoubtedly heard the saying �Don�t put all your eggs in one basket�?� The same principle applies to investing � put your investments into different baskets.� If some of the baskets should […]

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Balanced Mutual Funds

Many mutual funds invest mostly in stocks or bonds.� Balanced,asset allocation, and target retirement funds invest in stocks, bonds and cash. Reasons behind these funds One stop shopping � Rather than an investor buying an stock fund and a fixed income fund, they can just buy one balanced fund which will simplify their portfolio. Manage […]

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Mutual Funds

Mutual funds are investment funds that are run by a professional portfolio manager.� The portfolio manager uses their knowledge and experience to decide what the best investments are for their mutual fund. There are many types of mutual funds which can invest in different combinations of investments depending on the type of the fund.� All […]

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Stock Market Index

If you follow the news regularly then you have probably heard of the �Dow Jones� index and maybe the �S&P 500� index.� Let�s take a look at what a stock market index is and why you should know about them. An stock market index (or just “index) is a number that measures the relative value […]

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Bonds

Bonds, also known as fixed income, are an investment you can purchase where you essentially lend money to whoever issued the bond in exchange for future income in the form of interest payments.� At the end of the life of the bond, you get your original investment back.� The interest payments and principal (amount of […]

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Asset Allocation

Asset allocation refers to how much of any given asset class you have in your portfolio. An older investor might have a retirement asset allocation of mostly fixed income investments whereas a more aggressive investor might have most of their investments in stocks.� The basic asset classes of stocks, fixed income and good old hard […]

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Investment Asset Classes

An asset class is a grouping of similar investments whose prices tend to move together.� Asset classes can be defined on a very general level, such as stocks or on a more specific level, such as American silver producing companies. The concept of asset classes is important because one of the goals when building an […]

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401(k) Retirement Plan

A 401(k) plan is an investment account type designed to help you invest money for your retirement planning.� These plans are setup through your employer and the contributions will be deducted from your pay check. Any money you contribute to a 401(k) will not have income tax deducted from it, so the money inside a […]

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Dividends

Dividends are payments from a company to all its stock owners. Not all companies pay a dividend and the amount of each dividend is quite variable between companies. Some companies choose to keep all their profits to reinvest in the company and some companies choose to pay out some of those earnings as dividends. Whether […]

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Fixed Income

Fixed income investments are defined as securities that have a regular fixed return associated with them as well as having a guaranteed principal.� This investment asset class is often considered less risky than buying stocks which isn�t always true since some fixed income investments are very risky. A fixed income security is only as good […]

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Stocks

Have you ever heard someone talking about a �hot stock tip� or �playing the markets�?� Were you too embarrassed to admit that you don�t really know what a stock is or how to buy one?� Then keep reading! What is a stock? Stocks are shares in companies. If you buy a share of a company […]

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Investing

Investing is when you buy securities which will hopefully provide future income.� This income could be in the form of interest payments, stock dividends or capital gains (when you sell a security for more than you paid for it). These securities can take many forms: stocks, bonds, certificate of deposit (CDs), high interest savings accounts […]

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