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Hi, I am looking to invest my money in stock market and when i went to grab some information regarding their mutual funds and bonds. Please give some trustfull guidance, as we all heard in an advertisement Mutual Funds are subjected to market Risk, please read the offer kindly before buying it.
Extremely simplified::::::::::::::::::::::::::::::
Buying stock is actually buying a little tiny piece of the company.
Mutual funds means you give your money to someone who decides which company and/or kind of company (science/industry/etc) is making money and they pool lots of peoples money and buy little pieces of several companies
Bonds. There's different kinds of bonds. There're savings bonds. You buy these at the bank with a specific maturity date and a specified ending amount.
There're municipal bonds. These you invest a specified amount in a "normally" building project. They use your money and agree to reimburse you a specified amount later for it's use.
And there are also zero coupon municipal bonds which are like muni bonds except the interest you receive isn't federally taxed.
Bonds normally take MANY years to mature but can be cashed in with a penalty.
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Ok, tell me one thing i want to add interest on my saving monthly but it i am unable to find out the term onto which i invest. I don't want that my saving should be on a risk, what i want is a steady growth in it. Suggest me should i buy stock or invest in mutual funds. If you're answer is stock explain how can i buy and which company to trust on.
Bonds are debt obligations issued by entities, such as corporations or governments. When you buy an individual bond, you are essentially lending your money to the entity for a stated period of time. In exchange for your loan, the entity will pay you interest until the end of the period (the maturity date) when you will receive the original investment or loan amount (the principal). Types of bonds are classified by the entity issuing them. Such entities include corporations, publicly-owned utilities, and state, local and federal governments.
In mutual funds , funds from different investors are collected pooled together and then invested as a whole. Concept of bond is entirely different from MF's. Here no money of investors is pooled together.