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Investing

An Easy Way To Learn Investment Terminology

check out Investopedia.com's investment dictionaryIf you are working on developing your investment knowledge and are attempting to read financial articles, you will likely need help in learning all the investment terminology.  I find Investopedia.com’s dictionary extremely helpful in explaining investment jargon.

Not only does the site provide a definition, it also provides an explanation to further your understanding.

For example, when I looked up the word “bond”, this is what I found in the Investopedia.com dictionary:

What Does Bond Mean?

A debt investment in which an investor loans money to an entity (corporate or governmental) that borrows the funds for a defined period of time at a fixed interest rate. Bonds are used by companies, municipalities, states and U.S. and foreign governments to finance a variety of projects and activities.

Bonds are commonly referred to as fixed-income securities and are one of the three main asset classes, along with stocks and cash equivalents..

Investopedia explains Bond

The indebted entity (issuer) issues a bond that states the interest rate(coupon) that will be paid and when the loaned funds (bond principal) are to be returned (maturity date). Interest on bonds is usually paid every six months (semi-annually). The main categories of bonds are corporate bonds, municipal bonds, and U.S. Treasury bonds, notes and bills, which are collectively referred to as simply “Treasuries”.

Two features of a bond – credit quality and duration – are the principal determinants of a bond’s interest rate. Bond maturities range from a 90-day Treasury bill to a 30-year government bond. Corporate and municipals are typically in the three to 10-year range.”

So, as you can see, this site can be extremely helpful for anyone who is unfamiliar with investment terminology.  Check it out and before long you will be much more confident when you read about investments.  It is always a good idea to understand how your money is being invested, even if you have a managed portfolio through your financial institution.

Book Reviews

Grow Your Money – A Book with Good Investment Tips

grow your money contains good investment tipsGrow Your Money; 101 Easy Tips To Plan, Save, And Invest by Jonathan D. Pond

Grow Your Money is written by an expert financial planner and it contains advice on everything from budgeting to investing to estate planning.  It is geared towards Americans because it has in depth sections on the various types of IRAs and other American financial products, however, this book covers many other topics that are not specific to any particular country such as accumulating wealth, home renovations, and getting out of debt, to name a few.

I like the layout of the book and how the author makes complicated topics easy to understand.  He breaks the book down into sections each pertaining to a single idea so that you can easily find the topics that interest you.  There are some interesting quizzes throughout the book to help you to determine what kind of investor you are, and whether you are a spender or a saver.  I especially like the famous quotes he has on about every second page. 

I would recommend this book to anyone who wants to learn more about saving and investing their money, especially for Americans as there is a lot of great information about Roth and Traditional IRAs, SEP-IRAs, and 401(k) plans.

Investing

5 Quick Investment Tips

Below are some quick investment tips to keep in mind before pursuing any type of investment.  While investing your money is definitely a good idea, it’s important to make sure you are doing your due diligence prior to making any decisions.

1.  Before making any hasty investment decisions, be sure to get professional advice from someone you trust that is completely independent of the investment opportunity.

2.   Make sure to check the credentials of the investment company before dealing with them.

3.  Understand that investments involve an element of risk and cannot guarantee a return.  If the companies tell you otherwise, be very wary.

4.  Don’t sign up for anything immediately and don’t let anyone pressure you to make quick decisions. If the investment is legitimate they will have no problem letting you do your due diligence before committing to anything.

5.  Check out the past performance of the investments and if it is unavailable find out why.