 Investing:
Mutual Funds
Fund operated by an investment company that raises money from shareholders to invest in securities according to a prescribed objective.
Each shareholder's investment is priced at a net asset value representing that share's portion of the collective investments of the fund and at which price shares may be purchased or redeemed (sold).
Mutual funds have become the most popular method of investing for Americans.
Individual Retirement Account (IRA)
Private pension account available to individuals for saving and investing on a tax -deferred basis.
401(k)
Corporate retirement plan that allows employees to contribute pre -tax dollars in an investment vehicle like a mutual fund.
Many mutual fund organizations offer 401(k) plans with a wide
range of investment options and services.
Money Market Fund
A type of Mutual Fund that invests in commercial paper, banker's acceptances, repurchase agreements, government
securities, certificates of deposit, and other highly liquid and safe securities that pay money market rates of interest.
Though these funds are not federally insured, like a bank
account, there hasn't been a complete failure to date (there have been two failures, but, the shareholders were reimbursed in the first case and the second is still pending).
A Money Market Mutual Fund is not the same as a Money Market Deposit Account (MMDA's) that you get through a bank.
Certificate of Deposit (CD)
A specialized savings account that involves depositing money for a fixed period of time (such as three or six months, one or five years).
Money usually earns more interest in a CD than in a regular
savings account. Longer periods may result in higher interest rates. Taking out money sooner than you promised means paying penalties and possibly losing any interest you may have earned.
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