Stocks

Stock or equity is an ownership share in a company. By investing in stocks, you are holding a proportional part of the company’s assets and profits. Returns can be received through dividends if the stock you are holding issues them or appreciation of the stock share price.

Bonds

A bond is a fixed income investment consisting of a loan an investor makes to a corporation, government, federal agency or other organization in exchange for interest payments over a specified term plus repayment of principal at the bond’s maturity date.

Mutual Funds

A mutual fund is an investment company that pools money from many investors and invests it based on specific investment goals. The mutual fund raises money by selling its own shares to investors. The money is used to purchase a portfolio of stocks, bonds and other securities. Each share represents an ownership slice of the fund and gives the investor a proportional right.

ETFs

Exchange-traded funds (ETFs) combine aspects of mutual funds and conventional stocks. Like a mutual fund, an ETF is a pooled investment fund that offers an investor an interest in a professionally managed, diversified portfolio of investments. But unlike mutual funds, ETF shares trade like stocks on stock exchanges and can be bought or sold throughout the trading day at fluctuating prices.

Options

Options are contracts that give the purchaser the right, but not the obligation, to buy or sell the underlying security, such as a stock or exchange-traded fund, at a fixed price within a specific period of time.

Annuities

An annuity is a contract between you and an insurance company in which the company promises to make periodic payments to you, starting immediately or at some future time. You buy an annuity either with a single payment or a series of payments called premiums.

Some annuity contracts provide a way to save for retirement. Others can turn your savings into a stream of retirement income. Still others do both. If you use an annuity as a savings vehicle and the insurance company delays your pay-out to the future, you have a deferred annuity. If you use the annuity to create a source of retirement income and your payments start right away, you have an immediate annuity.

Bank Products

Banks and credit unions can provide a safe and convenient way to accumulate savings—and some banks offer services that can help you manage your money.

Deposits at banks and most credit unions are federally insured up to a limit set by Congress. And transaction (or checking) accounts and deposit accounts offer liquidity, making it easy for you to get to your funds for any reason—from day-to-day expenses to a down payment or money for unexpected emergencies. In addition to being insured by the FDIC, checking accounts let you transfer money by check or electronic payment to a person or organization that you designate as the payee.

But remember, the interest you earn from bank products—including certificates of deposit (CDs)—tends to be lower than potential returns from other investments.

There are a few different types of accounts provided by banks:

• Savings Accounts
• Money Market Accounts
• Certificates of Deposit (CDs)
• Federal Insurance

Futures

Commodity futures contracts are agreements to buy or sell a specific quantity of a commodity at a specified price on a particular date in the future. Commodities include metals, oil, grains and animal products, as well as financial instruments and currencies. With limited exceptions, trading in futures contracts must be executed on the floor of a commodity exchange.

The Commodity Futures Trading Commission (CFTC) is the federal government agency that regulates the commodity futures, commodity options, and swaps trading markets. Anyone who trades futures with the general or gives advice about futures trading must be registered with the National Futures Association (NFA), the independent regulator for anyone who trades futures with the general.

Before you invest in commodity futures, check to make sure the individual and firm are registered and whether they are the subject of any disciplinary actions. Use the NFA’s Background Affiliation Status Information Center (BASIC).

Insurance

Life insurance products are often a part of an overall financial plan. They come in various forms, including term life, whole life, and universal life policies. There also are variations on these—variable life insurance and variable universal life insurance—which are considered securities and must be registered with the Securities and Exchange Commission (SEC). FINRA has jurisdiction over the investment professionals and firms that sell variable life and variable universal life products.

Insurance products often are developed to meet specific objectives. For example, long-term care insurance is designed to help manage health care expenses as you age. As with other financial products, insurance products can be complex and come with fees, so it pays to do your homework before you buy.