The Value Of A Financial Investment Essay
Before I got started investing I did a bunch of research on the best ways to make my money work for me. That’s pretty much the main goal of making a financial investment, you want to see a positive output for the input you contributed. There are many ways to invest when it comes to stocks, mutual funds, ETF’s, Bonds, real estate, etc.. The list goes on. But in this post I’m going to break down investing in the stock market.
Stock - A stock is a type of security that signifies ownership in a corporation and represents a claim on part of the corporation 's assets and earnings. For example, I have several shares of common stock from Facebook. The closing price of $114 is the price that Facebook is currently trading at per share. If you wanted to buy 3 shares of this corporation it will cost you $342 plus $9.99 for commission. This here is called an exchange trade, you can either sell or buy with every trade and each time you make a trade the stock broker will charge you commissions. Buying individual stocks are the riskiest investment because you’re putting all of your investment in one company. If that company does bad all of your shares within that company will lose value. This is why people tend to lean towards bonds, mutual funds and ETF’s.
A mutual fund is nothing more than a collection of stocks and/or bonds. You can think of a mutual…