Investment Vehicles
Stocks
Stocks are shares of ownership in a company. Shareholders are entitled to a “share” in the profits of the company. Those profits are called dividends and are paid to shareholders.
Stocks are volatile and fluctuate in value on a daily basis. When compared to most other investment vehicles, stocks provide relatively high potential returns but also assume the risk of losing some or all of your investment due to volatility of the markets.
Bonds
Grouped under the general category called fixed-income securities, the term bond is commonly used to refer to any securities that are founded on debt. When you purchase a bond, you are lending out your money to a company or government. In return, they agree to give you interest on your money and eventually pay you back the amount you lent out.
The main attraction of bonds is their relative safety. If you are buying bonds from a stable government, your investment is virtually guaranteed, or risk-free. The safety and stability, however, come at a cost. Because there is little risk, there is little potential return. As a result, the rate of return on bonds is generally lower than other securities.
Mutual Funds
Mutual funds are an investment that allows you to pool your assets with a group of people in a diversified portfolio of stocks, bonds, or a combination of stocks and bonds. The assets in the portfolio are professionally managed to achieve a specified investment objective, such as growth or income.
The primary advantage of a mutual fund is that you can invest your money without the time or the experience that are often needed to choose specific stocks or bonds.
Annuities
An annuity is a contract between an insurance company and you in which a sum of money is deposited for a specified period of time. In the accumulation phase, the funds grow tax deferred. During the income phase, income is paid for a specified period of time.
For more information on
Investment Vehicles, contact
Tory Meiborg or
Jeremy Mead. They can be reached in Cedar Rapids at (319) 364-3041 or Iowa City at (319) 339-4884. Additionally, feel free to use our
Contact Us online form.