Posts Tagged ‘investments’

How to Invest in a Money Market

Posted June 3, 2011 by Caroline Leah

A money market account is actually a kind of mutual fund that functions almost like a savings account the main difference being the money market accounts pay rates of interest higher than the usual savings account. You can trade with the short term government and corporate bonds when you open an account with money market. The money market funds however have variable rates of interest as the make up of money changes according to the maturity of the short term bonds.

They are available in banks, credit unions and other financial institutions too. There are also money market funds that are tax exempted. You however need to be careful while investing in a money market. Here are a few tips and suggestions to keep in mind.

  • Before you start off with investing in money market accounts, you need to     first understand how the money market funds or accounts work. Only a thorough knowledge helps brings success in the field of investment.
  • Learn all the terms that are related to the money market by reviewing the glossary that is made available on the internet for the beginners.
  • There is quite a difference between the money market funds and money market accounts. Learn the difference and then choose which one is best suited for your needs and you can either make short term investments or long term too.
  • Gather details about the various popular money market funds including the minimum requirements for the investment. Make sure you have the required capital to make the investment before deciding where to invest money.
  • You can perform the research about the money market funds and accounts online and look out for the impressive looking ones. (more…)

Posted in Investing Strategies, Stock Market Investing | No Comments »

What are Municipal Bonds?

Posted May 16, 2011 by Bernz

If you are familiar with investing at all, you already know that there are two basic types of investments. The first type of investment that many people hear about on television and from other news media is a stock. Buying stock in a company is like becoming a part owner of the company. If the company does well, you can make money, but you also risk losing money if the company does not do so well. While stocks may be great investments for some people, they are not the right choice for everyone and every investment situation.

The second type of investment is a bond which is very different from a stock. While a stock is like purchasing part of a company, a bond is more like lending your money to the issuer, possibly a company or an organization. Bonds are also different because they are bought with an end date in mind. With a bond, you will not see the value increase or decrease, but you will be paid interest during the term of the bond.

There are a few different kinds of bonds, but one of the most popular kinds of bonds for investors, especially those in the higher tax brackets, is a municipal bond. Local governments issue municipal bonds which are the preferred choice for some investors because they are tax exempt unlike other bonds. If you are interested in purchasing a municipal bond, you will not have to pay tax, either to the state government or federal government, on the interest you earn from the bond.
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Posted in Bonds, Investing Basics, Investing Strategies | No Comments »

Buying Stocks Now- Throwing Good Money After Bad or Smart Investing?

Posted February 26, 2009 by Bernz

It’s now official. The American economy is in recession. The S&P 500 index- a broad-based thermometer of the health of American corporations- has declined almost 50% in the past 18 months.

stockmarketThe volatility of the stock market in the current recession has touched the majority of households. Investing in stocks was once the privilege of the rich, but today, many retirement plans, especially 401(k) plans, contain stock-based mutual funds and the values of these funds have dropped precipitously.

So why would anyone want to buy stocks right now? Surely, it’s time to tuck your money under your mattress and wait it out? Smart investors know better. They are using this time of market fear to pick up great values in stocks. The one thing that stock market performance has taught us over the past eighty years is that it always goes back up. Even in times of economic crisis (remember Black Monday?), the stock market always finds its bottom and begins its climb once again. Over time, the stock market has outperformed any other investment vehicle.

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Posted in Investing Strategies, Stock Market Investing | No Comments »

Making the Right 401(k) Choices

Posted February 3, 2009 by Bernz

Knowing which investment choices are right for you in your 401(k) plan has never been easy, but in the current economic environment, it can be downright torturous. Most funds that are available to choose from in your plan are declining in value and producing negative returns. This is also the case of the stock market as a whole. That means that your job is to select investment funds not to make the biggest return but to lose the least amount of money. Preservation of capital is tantamount during this extended recession.

401kMany investors make the unfortunate choice of trying to beat the stock market. However, it has been proven time and time again that, over time, managed funds rarely outperform the stock market as a whole, regardless of how talented and well-compensated the fund manager is. If seasoned experts cannot beat the market, it is highly unlikely that you will be able to. The best many investors can do is to match the performance of the stock market.  How can you choose investments in your 401(k) that will follow the stock market and preserve your retirement funds? Index funds.

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Posted in 401k, Financial Education, Financial Goals, Investing Strategies, IRA, Tax Reduction | No Comments »


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