project by Hunter Gosz
There are three different types of common bonds.
- Government bonds are a loan that you give the government that after its maturity date they will repay your money plus some interest. They are as reliable as the government a person lives under.
- Junk bonds are very high risk high reward bonds where a company needs to raise a lot of money fast to earn even more money, its risky as if they fail they may not be able to pay off there debt.
- Cooperate bonds are sold when a company needs to raise money for a new project or plan. They are higher risk than government bonds so they have higher interested rates for more reward if they succeed.
- 401k is a retirement plan that is offered by employers that means a part of a clients pay will be deducted into an account that will be kept until they retire.
- Traditional IRA is a retirement plan that allows someone to contribute money to an account to save for retirement that is partially tax free to fully tax free until the person takes out the money.
- Roth IRA is a retirement plan that allows someone add after tax income to an account to save for retirement, any withdraw or deposit it tax free after age 59 and a half.
A mutual fund is when a group of investors give there money to a professional investor to put the money in bonds, stocks, etc and then the professional pays back the normal investors with interest and any extra money he makes goes into him.
A futures market is when people bid on investments that become active in the future. They can be a great risk because future prices are very uncertain with inflation and stocks rising and falling. The contracts are sold at auction to the highest bidder.