The Inverse Relationship between Bond Prices and Bond Interest Rates

[wp_ad_camp_1] Bonds are considered less risky forms of investments than stocks, as the former does not have the same volatility as the latter has. It represents a promise to pay when the indebted entity, the bond issuer, borrows money from a buyer of the bond, the bondholder. Bonds are used by the government and private companies to finance desired projects. The interest rate of a bond is fixed when it is first issued. The payment comprises of two parts – the fixed bond interest rate or coupon and the final…

Read More

Protect Your 401k From Catastrophe With These Simple Tips

[wp_ad_camp_1] The last several years have done a number to many people’s nestegg.  Many people who relied on their 401k for their approaching retirement were no longer able to retire because their 401k lost so much value in the market due to the credit crisis.  If you want to protect your 401k from massive losses, follow these three tips.  These tips are designed to protect your assets moreso than growing it.  Therefore these tips are meant for those who are going to retire soon(ish).  But if you follow these tips, you…

Read More

How to Pick Stocks Like Warren Buffett

[wp_ad_camp_1] Warren Buffett is the greatest investor of our time, bar none. He started out with $90,000 (in 2009 dollars) when he graduated college. His net worth is now at roughly $44 billion. So should he be someone you should be listening to when it comes to investing?  I would say so.  If you want to learn from Warren Buffett, pay attention to the lessons he has expounded below.  This is a collection of some of the more important concepts I’ve gather from his materials (books, shareholder meetings, media appearances).…

Read More

What is a CD Account and How Does it Work?

You’ve probably heard of a CD account before but you don’t really know what it is.  A CD account, also called a certificate of deposit account, is a loan that you make to a bank for a fixed amount of time.  Certificate of Deposit accounts are known to be one of the safest investment vehicles.  In return for your loan, a bank will give you interest on your loan.  That is where the term CD account comes from,  you get a certificate of deposit once you agree to loan the bank…

Read More

How Does a 401k Work and How Do You Start One

[wp_ad_camp_1] The 401K is a great retirement vehicle. But employers do not do a great job of telling teaching their employees how to invest in it. This article will teach you how to start your 401k retirement plan and explain to you exactly how a 401k works. Because of the demise of pension funds, companies have moved to the 401k in order to help employees fund their retirements.   A 401k is essentially a retirement fund in which your employer matches a portion of your investments.  So you can see…

Read More

Beginner’s Guide To Stock Investing: How To Find Low Risk Stocks

[wp_ad_camp_1] As a beginner to stock investing, you want to start out with very simple and low-risk stock picks.   These stock picks aren’t necessarily 10-baggers (1,000% return on your investment) but they mitigate the risk of losing (too much) money.  These are stocks that will, for the most part, follow the market.  As a beginning stock investor, I feel that it is extremely important to start out with low risk stocks so you can get a feel of how the stock market reacts to certain news, numbers, and rumors.  Here…

Read More

How to Read a Company’s Financial Statement

In stock investing, it is important to base your decisions on sound analysis of the company’s performance and growth prospects. This is not possible without going through the nitty-gritty of a company’s financial statement. For instance, you need to know if it is generating revenues from its core businesses operation or if it has enough cash to cover dividend payment since dividends are usually paid in cash. This is best analyzed by looking at cash flow statements. If you are wondering just how much profit a company has made in…

Read More

What is a Bond and How do Bonds Work?

[wp_ad_camp_1] A bond refers to a debt security that pledges to make regular payments for a specified period of time. If you are wondering what a security is, it is a claim or entitlement on the issuer’s future assets or income. If you buy a bond, you are simply lending money in return for interest payments which the borrower or bond issuer makes periodically during the loan term. At the time of loan maturity, the bond issuer pays the principal or original amount of the debt to the lender or…

Read More