COMMON INVESTMENT TYPES

Bonds

When you buy bonds, you loan money to the government or to a company. Bonds are issued for a set period of time during which interest payments are made to the bondholder. The amount of these payments depends on the interest rate established by the issuer of the bond (the government or company) when the bond is issued. This is called a coupon rate. Coupon rates can be fixed or variable. At the end of the set period of time (called the maturity date), the bond issuer is required to repay the par or face value of the bond (the original loan amount).

Bonds are considered a more stable investment compared to stocks because they usually provide a steady flow of income. But because they’re more stable, their long-term return probably will be less than that of stocks. Bonds, however, can sometimes outperform a stock’s rate of return, depending on the particular stock.

Cash-equivalent

Cash equivalent investments, like passbook savings accounts, money market funds or certificates of deposit (CDs), protect your original investment and let you have access to your money.

These types of investments generally deliver a more stable rate of return. On the other hand, the rate of return (after taxes are paid) is often so low that it doesn’t keep pace with inflation. A passbook savings account, money market fund or CD may give you quick access to your cash and may provide more short-term security. However, they’re not designed for long-term investment goals like retirement.

Here are some types of cash-equivalent investment types:
• Money Market: A fund usually invested in Treasury bills, CDs and commercial paper from large established institutions. They are typically safe, liquid investments.
• Mutual Funds: A mix of investments that may include stocks, bonds and cash-equivalents. The fund is managed by a professional money manager and has a stated objective or investment style.

Stock Funds (aka, Equity Funds):

Mutual funds that generally involve more risk than Money Market or Bond funds - but they also can offer the highest returns. A Stock Fund's value (NAV) can rise and fall quickly over the short term, but historically stocks have performed better over the long term than other types of investments. Not all stock funds are the same (e.g., Growth Funds focus on stocks that may not pay a regular dividend but have the potential for large capital gains; other specialize in a particular industry, such as technology).

Bradford Financial offers a wide range of services to help you meet your investment objectives. We offer you to open an investment account to estimate investment offers and start collecting income and dividends from investments.
Our financial managers will help you to get more information about each of investment projects. We are the First at the  Market of Investments.

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