Fundamentals of Investing
Investing is simply the process of acquiring assets that you hope will grow in value. Investments can include owning a home, a business, real estate, having money in savings accounts and CDs at a bank or investing in stocks, bonds, and mutual funds. Stocks, bonds and mutual funds allow you to diversify your financial portfolio and perhaps increase your return on investment.
Stocks - You own a portion of the company. You can profit by owning shares when the company pays a dividend or if the value of the shares increase while you own them. You can also lose money if the value of the shares go down before you sell them.
Bonds - When you own a bond, you are lending money to the company or institution issuing the bond. You profit when you receive interest payments and if the value of the bond increases before you sell it. You can lose money if interest payments are not made, if the principal of the bond is not repaid when it is due, or if the value of the bond has fallen when you sell it.
Mutual Funds - You are buying shares in a company that, in turn, owns stocks in other companies or owns bonds issued by other companies or institutions. By investing in mutual funds, you get the professional services of the mutual fund manager who decides where and when to invest. You profit when the mutual fund distributes dividends (and capital gains and interest) and if the value of your mutual fund shares increases because of the increases in the underlying value of the stocks and bonds it owns.
When you make the decision to invest, you are leaving the world of insured and guaranteed returns found with savings accounts and CDs from a bank. Talking with an investment representative at FSB Warner Financial, 319-235-6561, will help you decide what opportunities are best suited for you.
Investment & Insurance Products: Not FDIC Insured. *No Bank Guarantee* May Lose Value