Investing Basics

Whether you invest through the company you work for or on your own, it is important for you to start as early as possible. This will allow you to maximize your returns over the years and establish a secure financial future for you and your family.

There are three basic types of investments you can choose from: stocks, bonds, and mutual funds.

Asset Class What it is Characteristics
Stocks/Mutual Funds Stocks are investments in individual businesses where you own a share of a company.

A mutual fund is composed of several stocks.

  • High potential for growth over the long term
  • Increased risk
  • Performance impacted by world-wide economic and political factors

When you buy a bond, you’re lending money to the issuer (e.g., a government, municipality, corporation, or federal agency), which then pays you back with interest.

Examples include: U.S. Treasury, state, municipal, and corporate bonds.

  • Potential for increased income
  • More stable than stocks
  • Bond prices decrease with rising interest rates
Short-Term or Fixed Income Investments These investments include cash, money market funds, U.S. Treasury bills, and certificates of deposit. They are designed to return your money with interest, after a relatively short amount of time.
  • Less volatile than stocks or bonds
  • Lower potential for growth
  • Little inflation protection


For additional information, you may contact one of the brokerage firms listed below.

Fidelity Investments