Seven Investment Terms Everyone Should Know

For those who have never given a second thought, their financial future, the term "Financial Planning" a scary. Investments can be a smart way to invest for your future money, but it can be confusing for people who have no experience in the financial business. Before you consult a financial planner is a good idea to familiarize yourself with some of the terms that you become likely to hear from him or her.

* Mutual Fund-An investment made with money that is collected by people with an investment objective in mind. The fund is handled primarily buys a person known as the fund manager. Mutual funds are easy and cost-effective, because you are responsible for making the decision about where to invest the money.

* Asset Allocation Fund-A mutual fund that contains different types of investments, such as stocks, bonds, real estate and foreign equities. These are typical of the small investors who want to invest in a variety of resources to maintain. Constant returns

* Risk-Return Trade-Off-This is the amount of money you can stand to lose relative to the amount of money you are willing to invest. Low risk investments often have low payouts, while the high-risk investments usually have higher payouts. When investing money you have the amount of money you can lose before determining how much money you are going to invest and where you decide to invest.

* Compounding-Money made an investment which are then reinvested in the same or another investment to generate. Their own income

* Bonds-Money that is lent to a company or government at a specified interest rate. The company will usually give a kind of document that explains the loan amount and the agreed interest rate and the total amount to be repaid at some time or "maturity".

* Stocks-Pieces of a company for sale. One could buy shares of a company at a certain price in the hope that the company would gain a significant amount of money and that they are able to sell at a higher price would be. Stocks

* Money Market Funds-money invested in debt by an investment fund. The aim is to obtain important money for the debt. The advantage of the Money Market Account is that they offer very low investment of less than $ 1.00.

Timothy Gorman is a successful Webmaster and publisher of . He provides more debt relief, credit counseling, repair and free financial planning information  that you can research in your pajamas on his website.