Easy+Investing

Establishing Your Investment Goals

Before you establish your financial goals you need to outline your financial goals, ask these questions: - What will you use the money for? - How much money do you need to satisfy your goals? - How will you get the money? - Are you willing to make sacrifices to save?

Obtaining the money you need to get started: - Pay yourself first - Take advantage of Employer-Sponsored Retirement Plans - Participate in an Elective Savings Program - Make a special savings effort one or two months a year - Take advantages of gifrs, inheritances, and windfalls

Factors that affect your choice of investments: - Safety and Risk Speculative investment is a highrisk investment made in hope of earning a relatively large profit in a short time - Five Components of the Risk Factor Inflation Risk Interest rate risk Business Failure Risk Financial Market Risk - Investment Income Investment growth Earnings - Investment Liquidity

Types of investments: Equity capital is money that a business gets from its owners in order to operate. The corporation does not have to pay you dividends which are distributions of money stock or other property. The two basic types of stock are common and preferred. Common Stock - is the stock that provides the most basic form of corporate ownership, and it entitles you to voting privileges. Preferred Stock - is stock that gives the owner the advantage of recieving cash dividends before common stockholders recieve any. Corporate and Government Bonds Mutual Funds Real Estate

Evaluating Investment Alternatives Diversification is the process of spreading your assets among several different types of investments to lessen the risk.