Build Your Wealth

What is a Stock?

A stock, also known as equity, is a security that represents ownership in a corporation. When you own stock, you own a portion of the corporation's assets and profits proportionate to the amount of stock you own. Each unit of stock is referred to as a "share."

Stocks are primarily traded on stock exchanges and are a common component in individual investor portfolios. The transactions of stocks must comply with government regulations to ensure protection for investors from fraudulent practices. Historically, stocks have proven to outperform other investments over the long term. You can purchase stocks through online stockbrokers.

What is a Bond?

A bond is a fixed-income instrument that represents a loan made by an investor to a borrower, typically a corporation or government entity. When you purchase a bond, you become a creditor of the issuer, and you are entitled to receive periodic interest payments and repayment of the bond's face value when it matures. Bonds are used by companies, municipalities, states, and governments to finance their operations and projects.

What is a Mutual Fund?

A mutual fund is a financial vehicle that pools money from multiple investors to invest in various securities, such as stocks, bonds, money market instruments, and other assets. The fund is managed by professional money managers who allocate the assets and strive to generate capital gains or income for the investors. The fund's portfolio is structured and managed to meet the investment objectives outlined in its prospectus.

Bank Products

Banks and credit unions offer a safe and convenient way to save money and offer various financial management services. Deposits in these institutions are insured up to a limit set by Congress. Transaction accounts and deposit accounts provide easy access to your funds for everyday expenses or unexpected emergencies. Checking accounts also offer the ability to transfer funds through checks or electronic charges. However, the interest earned on bank products, including certificates of deposit, tends to be lower than other investment options.

Options

Options are contracts that give the buyer the right, but not the obligation, to buy or sell a security, such as a stock or exchange-traded fund, at a predetermined price within a specific period. Options can be used to manage risk in investing, but it's essential to understand that buying and selling options also come with risk, and it's possible to lose money. Educating yourself on different options, trading strategies, and associated risks is wise.

What is an Annuity?

An annuity is an insurance contract issued by financial institutions that pay out a fixed income stream in the future. Investors can purchase annuities through monthly premiums or lump-sum payments. The issuing institution provides a stream of payments for a specified period or for the remainder of the investor's life. Annuities are commonly used for retirement and help individuals address the risk of outliving their savings.

Retirement

Saving for retirement and managing retirement income are both crucial aspects of personal financial management. Tax-advantaged options like a 401(k) or IRA can be smart choices for saving, offering potential tax benefits and the opportunity for savings to compound over time. Whether you're just starting or already retired, managing your retirement income is important to ensure a comfortable retirement.

What Is a Registered Education Savings Plan (RESP)?

A Registered Education Savings Plan (RESP) is a government-sponsored investment plan aimed at financing a child's future post-secondary education. Subscribers to an RESP make contributions that grow tax-free, with the government also providing additional funding for children under the age of 18. The objective of an RESP is to provide families with a tool to save for their child's education and ensure they are financially prepared for the future.

What Are Initial Coin Offerings (ICOs) and Cryptocurrencies?

Initial Coin Offerings (ICOs) and cryptocurrencies are digital assets that have gained popularity and attracted attention from a wide range of investors. The markets for these assets are constantly evolving and are worth billions of dollars. Despite the potential rewards, many individual investors struggle to understand these complex investment products and assess their associated risks.

What Is a Commodity Futures Contract?

A commodity futures contract is a legally binding agreement between two parties to buy or sell a specific amount of a commodity at a predetermined price on a future date. These contracts are used to either protect an investment position or speculate on the future price movements of the underlying commodity. Commodity futures are popular among investors seeking to hedge against price risks or make investments based on their predictions of market trends.

What Is Life Insurance?

Life insurance is a type of financial product designed to protect families and individuals in the event of the policyholder's death. Life insurance policies come in several forms, including term life, whole life, and universal life. There are also variations of these policies, such as variable life insurance and variable universal life insurance, which are considered securities and must be registered with the Securities and Exchange Commission (SEC). The Financial Industry Regulatory Authority (FINRA) has jurisdiction over the investment professionals and firms selling these insurance products.