Par Excellence Demo

an exciting part of investing, having an understanding of the basics is key to building a long-term strategy. Investing remains one of the most effective ways to get your dollars working for you today so that you’ll be financially secure tomorrow. Investment vehicles vary in terms of risk, from the safer money market securities to the highly volatile futures and commodity offerings. In general, the amount of risk investors take will correspond with the return they can potentially earn. In other words, high risk generally correlates with high return and lower risk with lower return. Where an investor’s portfolio falls on the risk spectrum should reflect the particular investor’s: - Long-term goals - Immediate need for money - Age - Risk tolerance. The risk vs. return trade-off When you’re investing for a specific goal, like college or retirement, the amount of time that stands between now and the date you’ll need the money will help determine your investment strategy. The reason time horizon plays such a big part in investing is that investments that fluctuations in value have the potential to produce larger returns over time. If you can tolerate a high degree of fluctuation – that means leaving the money invested through all the ups and downs – you can seek greater potential returns. Then, as you move closer to your goal, you can begin to move the money into more stable investments so the money will be there when you need it. Understanding your time horizon When you make an investment, you are buying a security that either promises, or offers the potential, to generate cash. This cash is considered the return on your investment. The type of cash an investment generates can tell you a lot about how certain the returns are and how much risk is involved. Investment returns The word ‘yield’ is primarily used by banks to describe the amount of interest you’ll receive on a certificate of deposit or other type of account. There’s little guesswork here. The bank tells you in advance what you’ll be earning, and you can pretty much count on it. Yield This is similar to yield. In the investment world it refers primarily to bonds. If you buy a $10,000 bond that pays eight per cent interest, you’ll receive interest payments of $800 per year until the bond matures, at which time you get your $10,000 back. In most cases the interest amount is stated in advance, so you know going in what your return on investment will be. Interest A stock dividend is a check that some companies pay to shareholders. Dividends are declared each quarter and can go up or down but usually don’t change very much. Similarly to bond interest, you can usually count on stock dividend especially when you invest in large established companies. Dividend stocks

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Par Excellence Demo Contents Why I am Optimistic about Women in Business All the Presidents, Women Maverick Who Took on a Start-Up-and Learned a Valuable Lesson Golf Advice to Women Golfers (And it's Not How to Hit a Ball) Lifestyle You Shall go to the Ball, Cinderella (But First you Have to Get Real...) Travel Health

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