Many great fortunes have been made by purchasing the right stock at the right time but the risk inherent in the stock market means that there will always be a role for bonds to play.
Hedge funds are periodically in the news, so let’s shine a light into that corner of the market beginning with a definition. When used as a verb, hedge means to limit or qualify (something) by conditions or exceptions. Since we know that a fund is a pooled investment strategy, we can see that a hedge fund is a pooled investment used to limit risk.
If an investor decides that stock ownership seems like a workable strategy for making money over time, how does she or he decide which company to become an owner of, i.e. which stock to purchase? Choices abound. There are shares of around 8,000 companies currently available on US exchanges and at least that many more on foreign exchanges.
A recently widowed woman visited our office not long ago asking for help understanding her investment portfolio. Fortunately, she was in good financial shape but I was struck by some of her questions. While I strive for clarity both in person and in print, at one point she asked me what an index fund was.
My last article featured a couple of sketches by Carl Richards, a Utah-based financial planner who uses a pencil to illustrate various financial planning concepts. I’d like to enlist his help again this week as I talk more specifically about investing.
Over the years I’ve been involved in the world of investments, I’ve found that my clients have been able to make money in all three of stocks, bonds and real estate, though rarely at the same time. Since no one knows the best time to invest in any one of them, we encourage most of our clients to use all of them.
If you’re human you couldn’t possibly have avoided thoughts of what you might do if you had won the recent Mega Millions lottery of over $640 million.
You’re entertaining some friends at your house and everyone is having a marvelous time. Suddenly you hear a crash in the kitchen and you race to investigate. You find one of your friends laying flat on her back, unconscious.
If any good came out of the financial crisis and the Great Recession, it is that it made many of us become more financially literate and more aware of the need to pay attention to our finances. We now think before making purchases and we are better at prioritizing our expenditures.
Money is just one of those things that sometimes brings people as much pain as it does pleasure. As the economy in an up cycle of the recession, things are looking better but just the thought and uncertainty of an unstable economy is often enough to bring the fear back into people’s minds