Portfolio Basics
Once you’ve established your financial goals, your tolerance for market risk, and your investment time horizon, it’s time to select the actual securities you plan on buying. The 3 basic investment vehicles are stocks, bonds, and mutual funds.
Stocks
At the higher risk, higher reward end of the spectrum, stocks represent your best opportunity for long-term growth.
Bonds
There’s a place in every portfolio for bonds, because they operate differently from stocks. Bonds offer more stability to help preserve the amount of money which you initially invest.
Mutual Funds
Mutual funds offer the simplest and most diversified investment alternative–they`re also a way to hand off the day-to-day management of your portfolio to a real pro.
Buying Stocks and Bonds
There are many routes to making investment purchases, depending on your own expertise and how independent you choose to be.
