The purpose of today’s presentation is to discuss the various types of investments. Now let me begin by explaining that I would like briefly to talk about the meaning of the words money and investment; secondly, I want to cover the different types of investments. It is vital to note that money is a current medium of exchange in the form of coins and banknotes, while investment is the act of putting money into something to make a profit or get an advantage, or the money used to do this. It is known that the various types of investments are tools that can help you achieve your financial goals. Moreover, each broad investment type—from bank products to stocks and bonds—has its own general set of features, risk factors and ways in which they can be used by investors. Let’s speak about the first type – stock. When you invest in a stock, you become one of the owners of a corporation. Moreover, stocks represent ownership shares, also known as equity shares. Whether you make or lose money on a stock depends on the success or failure of the company, which type of stock you own, and what’s going on in the stock market overall and other factors. Let’s turn to bonds. A bond is a loan an investor makes to a corporation, government, federal agency or other organization in exchange for interest payments over a specified term plus repayment of principal at the bond’s maturity date. However, when you invest in bonds and bond mutual funds, you face the risk that your investment might lose money, especially if you bought an individual bond and want or need to sell it before it matures. By the way, bond mutual fund prices can fluctuate, just as stock mutual funds do. Risk will also vary depending on the type of bond you own. The next type of investment are bank products. Banks and credit unions can provide a safe and convenient way to accumulate savings—and some banks offer services that can help you manage your money. In addition to the above, deposits at banks and most credit unions are federally insured up to a limit set by Congress. More importantly, transaction accounts and deposit accounts offer liquidity, making it easy for you to get to your funds for any reason. In addition to being insured by the Federal Deposit Insurance Corporation, checking accounts let you transfer money by check or electronic payment to a person or organization that you designate as payee. But remember, the interest you earn from bank products—including certificates of deposit — tends to be lower than potential returns from other investments. An annuity is a contract between you and an insurance company in which the company promises to make periodic payments to you, starting immediately or at some future time. Besides, annuities come with a variety of fees and expenses, such as surrender charges, mortality and expense risk charges and administrative fees. Nevertheless, annuities also can have high commissions, reaching seven percent or more. Let’s speak about investment products. Investment products abound that offer alternatives to conventional stock and bond investments. It means that these products are sometimes referred to as structured products or non-conventional investments. They tend to be both more complex than traditional investments, and often tempt investors with special features and higher returns than offered by basic investments. Some examples of complex products include notes with principal protection and high-yield bonds that have lower credit ratings and higher risk of default, but offer more attractive rates of return. Although these products may have attractive qualities, it is crucial to understand each investment’s distinct features, risks and rewards. To conclude I think we have seen few types of investments improving our understanding in this issue. May I thank you all being such an attentive audience. Now I’d like to invite your comments.
