Types of Investments

Stocks

Stocks are a small piece (or share) of ownership in an individual company. When the value of the company increases, you earn money on each share. When the company value decreases, you lose money for each share.

Bonds

Bonds are a form of debt that you buy from a corporation or the government. You’d buy a bond and then overtime the entity will pay you interest. You get interest payments over a certain amount of time, and then at the end of that period (when the bond “matures”) you get your whole original investment back.                                                          

CDs

CD stands for Certificate of Deposit which is a savings certificate that has a fixed interest rate and matures over a set period of time. These are very similar to bonds, but are usually given out by commercial banks.                  

Futures

Futures are the right to buy a specific commodity; agriculture is a common example, at a future date for a certain price. You’d want to buy the future at a low cost in expectation that the cost of that commodity would go up. The cost may go up if the environmental conditions, like low rain, lead to low production of a commodity, but it’d go up when overproduced.

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