In finance: A certificate representing a share of ownership in a company. Stock is the ownership of a corporation represented by shares that are a claim on the corporation’s earnings and assets. There are many kinds of stocks, the most widely known being common stock, which usually entitles a stockholder to vote in the election of directors and other corporate matters.
In viticulture: Grape variety used as the underground portion of a grafted vine onto which the scion…
A pooled investment vehicle; its securities are managed for a fee by a professional investment group.…
A term, derived from the most expensive chips in a poker game, used to indicate the stock of companies with long records of growth and profitability; i.e., the company has been growing and has been paying dividends for a long time.…
A report that public companies are required to file annually that describes the preceding year’s financial results and plans for the upcoming year. Annual reports include information about a company’s assets, liabilities, earnings, profits, and other year-end statistics. If the public can buy stock in a company, that company has to issue a report every year that explains how well it did in the past year and what its strategy is for next year. The report includes what the company …
The steps below suggest important actions for you to take to establish a solid foundation for future investing activity. Once completed, you will be ready to begin developing a personal investment plan.
Check each action step as it is completed.
Investor A invests $2,000 a year for 10 years, beginning at age 25. Investor B waits 10 years, then invests $2,000 a year for 31 years. Compare the total contributions and the total value at retirement of the two investments. This example assumes a 9 percent fixed rate of return, compounded monthly. All interest is left in the account to allow interest to be earned on interest.
| Age | Years | Investor A | Investor B | ||
|---|---|---|---|---|---|
| Contributions | Year End Value | Contributions | Year End | ||
Here is how time can work for you:
Compounding works like this . . .
The interest earned on your investments is reinvested or left on deposit. At the next calculation, interest is earned on the original principal plus the reinvested interest. Earning interest on accumulated interest over time generates more and more …
Your Investment Goals
Goals are specific things (e.g., buy a car, put a new roof on the house) that people want to do with their money. As people move through various life stages, their needs and financial goals change. Your selection of investments should relate closely to your financial goals. Each goal will define the amount and liquidity of the money needed as well as the number of years available for the investment to grow.…
The return on any investment is influenced by your federal, state, and local tax situation. Investment earnings may be:
Your Time Horizon
Time is a very important resource to investors.
Young investors with a long time horizon may choose investments that exhibit wide price swings, knowing that time is available for fluctuations to average out. Families investing for a specific mid-life goal (e.g., funding a child’s education or purchasing a home) may choose a more moderate course which has opportunity for growth, but provides more safety for the principal. Individuals nearing retirement and those with the need to depend …
