Beginner's Investing Guide to Make Your Money Work for You
So you've decided to start investing. Congratulations!
Whether you're just starting out on your own, in the middle of your career, approaching retirement age, or in the midst of your golden years, this means you've begun to think about your financial future.
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The First Investing Step Is Figuring Out Which Types of Assets You Want to Own.
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Information is
being presented without consideration of the investment objectives,
risk tolerance or financial circumstances of any specific investor and
might not be suitable for all investors.
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Femkonsa Capital Investment do not provide tax, investment, or financial services and advice.
Past performance is not indicative of future results. Investing involves risk including the possible loss of principal.
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Disclaimer: The information on our site and our social media pages is provided for discussion purposes only, and should not be misconstrued as investment advice. Under no circumstances does this information represent a recommendation to buy or sell securities.
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Investing in Stocks
When people talk about investing in stocks, they usually mean investing in common stock, which is another way to describe business ownership, or business equity. When you own equity in a business, you are entitled to a share of the profit or losses generated by that company's operating activity.
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Investing in Privately Held Businesses: These are businesses that have no public market for their shares.
When started from scratch, they can be a high-risk, high-reward proposition for the entrepreneur. You come up with an idea, you establish a business, you run that business so your expenses are less than your revenues, and you grow it over time.
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Investing in Publicly Traded Businesses: Private businesses sometimes sell part of themselves to outside investors, in a process known as an Initial Public Offering, or IPO. When this happens, anyone can buy shares and become an owner.
The types of publicly traded stocks you own may differ based on a number of factors. For example, if you are the type of person that likes companies that are stable and gush cash flow for owners.
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Investing in Fixed-Income Securities (Bonds)
When you buy a fixed income security, you are really lending money to the bond issuer in exchange for interest income. There are a myriad of ways you can do it, from buying certificates of deposit and money markets to investing in corporate bonds, tax-free municipal bonds, and U.S. savings bonds.
As with stocks, many fixed-income securities are purchased through a brokerage account. Selecting your broker will require you to choose between either a discount or full-service model. When opening a new brokerage account, the minimum investment can vary.
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Investing in Real Estate
Real estate investing is nearly as old as mankind itself. There are several ways to make money investing in real estate, but it typically comes down to either developing something and selling it for a profit, or owning something and letting others use it in exchange for rent or lease payments. For a lot of investors, real estate has been a path to wealth because it more easily lends itself to using leverage.
This can be bad if the investment turns out to be a poor one, but, applied to the right investment, at the right price, and on the right terms, it can allow someone without a lot of net worth to rapidly accumulate resources, controlling a far larger asset base than he or she could otherwise afford.
Something that might be confusing for new investors is that real estate can also be traded like a stock. Usually, this happens through a corporation that qualifies as a real estate investment trust, or REIT.
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Where to Invest …
Where is the best place to invest now?
How do I know which funds will do the best in the next year and beyond?
No one knows the answers with certainty, but there are smart, strategic and sound moves you can make now to invest wisely for both short-term and long-term time horizons.
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Commodities Mutual Funds…
Commodity Funds 101…
Investing in commodities is one of the best means of hedging a portfolio that is otherwise dominated by stocks against unexpected financial or political crises or ordinary economic downturns.
Mutual funds provide investors with easy exposure to the commodities markets while avoiding the complications and additional risks of directly trading highly leveraged commodity futures. Commodity mutual funds typically invest in both the stocks of companies involved in commodities, such as mining companies and in commodities proper. One advantage of this approach to commodity.
Investing is that commodity mutual funds may perform well even when commodity prices overall are not.
Commodities get a lot of attention from the media. The price of oil, gold, corn, soy and hogs are in the national news nearly every day. While investing in the commodities markets is a fairly sophisticated endeavor, commodity mutual funds provide an opportunity for almost any investor to get a piece of the action.
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A Variety of Fund Types
The generic label "commodity fund" actually captures several distinct types of investments.
Commodity Funds
These funds are true commodity funds in that they have direct holdings in commodities. For example, a gold fund that holds gold bullion would be a true commodity fund.
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Commodity Funds That Hold Futures
Holding commodity-linked derivative instruments is a much more common mutual fund strategy for investing in the commodities markets. Most investors have no desire to take delivery of hogs, corn, oil or any other commodity, they simply want to profit from price changes. Purchasing futures contracts is one way to achieve this objective.
Natural Resource Funds
Funds that invest in companies that are engaged in businesses that operate in commodity-related fields, such as energy, mining, oil drilling and agricultural businesses, are often referred to as natural resource funds.
Pros and Cons of Investing in Commodity Funds
Commodities offer portfolio diversification. Investing in futures contracts or actual commodities provides a portfolio component that is not a traditional stock, bond, or a mutual fund that invests in stocks and/or bonds. Historically, commodities have had a low correlation to traditional equity markets, meaning that they do not always fluctuate in tandem with market movements
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Utility funds
The Utilities sector includes companies that engage in the production and delivery of electric power, natural gas, water, and other utility services, such as steam and cooled air.
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Utilities Sector - Find Investments
The Utilities Sector encompasses those companies considered electric, gas or water utilities, or companies that operate as independent producers and/or distributors of power.
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Real Estate Funds
Real estate portfolios invest primarily in real estate investment trusts (REITs) of various types. A REIT is a company that owns, develops and manages real estate properties that produce income.
There are several different types of REITs, including apartment, factory outlet, health care, hotel, industrial, mortgage, office and shopping center REITs. By law, REITs have to disburse at least 90 percent of their taxable income every year to shareholders by paying them dividends.
The U.S. Securities and Exchange Commission regulates REITs in the U.S. In addition to individual REITs, investors can purchase shares of exchange-traded funds or mutual funds that hold one or more REITs in their portfolios. Some portfolios in this category also invest in real estate operating companies.
If you're looking for good REIT index funds to invest in, check out the top-ranked real estate mutual funds below.
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Real Estate funds
The Real Estate sector is primarily made up of companies that own commercial real estate properties. A large portion of the companies are structured as Real Estate Investment Trusts (REITs).
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Technology funds
Technology portfolios buy high-tech businesses in the U.S. or outside of the U.S. Most concentrate on computer, semiconductor, software, networking, and Internet stocks. A few also buy medical-device and biotechnology stocks and some concentrate on a single technology industry.
nvesting in technology mutual funds can be a smart way to tap into what may be the best long-term growth bet of the century.
You don't have to think too deeply or for very long to realize the greatest driving force behind the U.S. and world economies—technology. And the best way to tap into tech stocks is arguably with mutual funds that concentrate their holdings in this growth sector.
Technology Mutual Funds: Best Way to Invest in the Tech Sector
A sector fund is a mutual fund or exchange-traded fund (ETF for short) that invests primarily in one industrial sector of the economy. Any list of sectors you find will usually include technology, financial, consumer cyclical, consumer staples, utilities, energy, natural resources, healthcare, real estate, and precious metals.
The technology sector is a category of stocks that contains technological businesses, such as manufacturers producing computer hardware, computer software or electronics and technological service industry companies.
Perhaps the greatest advantage of buying technology mutual funds is that investors can gain access and exposure to dozens or hundreds of technology stocks in just one fund. Another advantage, as is the case with other mutual funds and ETFs, is that the investor does not need to spend time researching and analyzing individual stocks.
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