i need to know any and everything about stocks and bonds, I'm interested about them?

Question

stocks and bonds, investments

Answer 1

Fantastic. There are a few sources that will explain them:

1) Book: Investing for Dummies, by Eric Tyson
2) My free downloadable book at http://www.invest-for-retirement.com and go straight to chapters 10 - 15 which will explain, in plan English, the anatomy of bonds and stocks
3) http://www.investopedia.com has some tutorials on bonds and stocks

(The above poster recommended "Common Sense on Mutual Funds" by John Bogle. And rightfully so. Although Mr. Bogle doesn't explain the intricacies of bonds and stocks in this book, he does talk about the mutual fund industry and the triumph of index funds. This is a monumental invesing book that will change your whole paradigm on investing. It should be your second book after reading through one of the above recommendations.)

Companies can raise capital in two general ways. They can issue stocks or bonds. A stock is ownership in a company. When you own part of a company, your investment's value is tied directly and proportionately to the performance of the company. This is because the stock's value is the predicted discounted dividends. But since the company makes no formal promises of any dividend payments, there are no guarantees. There is significant risk you will receive dividends in an amount less than you anticipated. In fact, there is a risk that the stock's price may drop to zero. Remember Enron?

Bonds, on the other hand, are a lending investment and have more guarantees. The value of a bond is tied non-proportionately to the performance of the company. The company need only perform well enough to remain fiscally solvent (able to pay its debt). If the company does extremely well, you will not receive any income higher than the pre-determined interest payments.

Bonds are more secure than stocks for two main reasons. First, because you know the stream of income (the interest and principal payments) in advance. Secondly, because bondholders are entitled to first dibs in the event of a company's bankruptcy. If a company goes under, its assets are liquidated and returned to the bondholders first. Stockholders get sloppy seconds, if any is left.

Answer 2

See if your library has some of these:

Thomas P. Au. A Modern Approach to Graham and Dodd Investing. Wiley, 2004.

Norman Berryessa, John Templeton, and Eric Kirzner. Global Investing the Templeton Way. Dow Jones-Irwin, 1988.

John C. Bogle. Bogle on Mutual Funds: New Prospectives for the Intelligent Investor. Irwin Publishing, 1994.

-----. Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor. Wiley, 1999.

-----. Bogle on Investing: The First 50 Years. McGraw-Hill, 2000.

Benjamin Graham. The Intelligent Investor. Harper-Collins, 1985.

Answer 3

There are many types of investments. One of the best ways to get financial advice is to see your insurance agent, believe it or not. It may be possible to get free financial counseling from the insurance company (mine does provide this and yes some companies do charge, so ask first). You can pick a few stocks and play the market virtually, while checking out different brokers to see how much the commission is. You can also look at online brokerages that charge smaller fees than larger brokerages. Your bank has someone who you can ask to speak with, this usually costs by the hour, but is very useful, if you can understand the terminology.

You may benefit more than anything else from looking at some of the online financial sites - Forbes, Fortune, Yahoo Finance, and the like. These sites will provide you with useful information and possibly even an opportunity to look at a glossary, if they have one.

Do as much research as possible when starting out. I think you are in the same boat as I am, I got started a couple of months ago and it takes a while, but it is worth it!

You may want to look into ways of protecting your money, like a trust (highly recommended if you have over $2M USD)

Answer 4

I would recommend learning the currency market using a hedging strategy like freedomrocks. Do not day trade in the currency market because its too risky. If you follow my advice you will be very rich. Check out www.freedomrocks.com/freedemo and then www.currencyleader.com. Take care.

Answer 5

read the following books:
the intelligent investor
security analysis

i highly recommend them. they both written by Benjamin Graham. he is the one who taught Warren Buffet.

Answer 6

Harvard.