9. Investment (2).ppt

• The action or process of investing money for profit or material result.

• A thing that is worth buying because it may be profitable or useful in the future.

Stock - is an equity security, which means it imparts ownership.

Bonds - unlike stocks, are debt securities meaning they are guaranteed.

Mutual fund - is a company that pools money from thousands of investors to invest in a diversified portfolio. Because the portfolio is built up by the fund manager, there is no need for investors to buy and sell all those securities themselves (which saves a ton of money in fees).