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INVESTMENT VEHICLES

Many Asset Classes to Achieve Your Financial Goal

 

STOCKS (EQUITIES)

Stocks (or shares) are pieces of individual companies. When you buy a stock, you are buying partial ownership of that company.  Investors reap the reward when the company does well. The growth in earnings usually results in an increased stock price. Some companies issue periodic dividend payments to owners, which can be a source of income, along with capital gains.

EXCHANGE-TRADED FUNDS (ETF)

ETFs and Index Funds are groups of assets (typically stocks, but can be bonds and other assets) that you can purchase in secondary markets such as exchanges. ETFs and Index Funds allow for easy diversification because when you buy the fund you are buying all of the stocks or bonds that fall within that fund. These funds typically mirror various markets and established indices (like the S&P 500) without active management.

MUTUAL FUNDS

Mutual Funds are a group of assets (typically stocks, but can be bonds and other assets) that you can purchase by pooling money with other investors. Mutual Funds allow for easy diversification because when you buy the fund you are buying all of the stocks or bonds that fall within that fund. Though, they are usually actively managed by fund managers, which leads to higher costs.

REAL ESTATE INVESTMENT TRUST (REIT)

A real estate investment trust (REIT) is a company that owns, operates, or finances income-generating real estate. REITs are traded on exchanges. Modeled after mutual funds, REITs pool the capital of numerous investors. This makes it possible for individual investors to earn dividends from real estate investments—without having to buy, manage, or finance any properties themselves.

BONDS

Bonds are debt securities. Investors lend your money to the issuer and get interest payments in return. You can invest in bonds either individually or through ETFs and various funds. Bonds offer a lower return compared to stocks but are safer investments than stocks. Selecting investment-grade bonds with a low risk of default is important.

LEVERAGED SECURITIES (OPTIONS, FUTURES, FOREX)

We do not use this asset class for our clients due to high risk potential. Leverage is an investment strategy of using borrowed money—specifically, the use of various financial instruments to increase the potential return of an investment. With leveraged securities you can control a larger assets with smaller initial investment. This can be highly rewarding at the same time risky. Without use of appropriate risk limiting strategies, one can risk the entire account balance.

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