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Investing
How would you evaluate your knowledge about investing? Take a deeper dive into investing by reviewing our articles that discuss a variety of topics, including college savings, mutual funds, stocks, portfolio diversification, IRAs, estate planning and more.
Common 529 plan myths include that the money can only go toward college tuition, families must contribute a certain amount, gift tax doesn't apply, there are no contribution limits, account ownership doesn't matter, and families can only open an account in their state of residence.
Grandparents can support their grandchildren's education by opening their own 529 college savings accounts or contributing to parent-owned accounts, but should be aware of gift tax limits and the potential impact on financial aid when making contributions.
Investing during a recession involves strategic planning to help protect and grow assets despite economic challenges. Learn essential strategies for making wise investment decisions when the economy is down.
Inflation reduces the purchasing power of cash savings over time and can erode fixed investment returns, so it's important to hold some assets like stocks that may appreciate with inflation.
When opening an investment account, you should understand the different types of accounts and their tax treatment, as well as research firms and fees to find one that aligns with your financial goals. You may want to consult a financial professional for guidance on selecting the right account type and provider for your needs.
Financial assets are contractual assets that derive their value from ownership claims. Examples of financial assets include stocks, bonds, mutual funds, cash, checking/savings accounts, and certificates of deposit.
529 plans, managed by each state, include prepaid tuition and savings options. Savings plans offer tax benefits for education but impose penalties for non-qualified withdrawals, with potential extra perks depending on the state.
Asset allocation refers to the mix of investment assets held in a portfolio, such as stocks, bonds, and cash. Determining your asset allocation is one of the first steps in forming an investment objective.
To start investing in your 20s, begin by setting aside a portion of your earnings regularly into an age-appropriate diversified portfolio, consider tax-advantaged accounts like 401(k)s and IRAs, and automate contributions for consistency and long-term growth.
Explore the main types of mutual funds—equity, bond, hybrid, money market, index, and actively managed—each investing in various securities like stocks, bonds, and cash to align with risk and return goals.
To manage future college costs, parents can start saving early, set contribution goals, and consider tax-advantaged options like life insurance to fund this important expense.
College expenses rise annually, making it essential to budget for tuition, room and board, textbooks, and fees. Planning and cost-saving strategies, like buying used books, can help manage the costs.
Compound interest adds interest to your principal, then calculates future interest on the new total, leading to exponential growth over time. It can boost your retirement savings.
Long-term investments focus on growth over 10+ years, while short-term investments prioritize capital preservation for under 3 years when quicker access to funds is needed.
A hybrid mutual fund is an investment vehicle that combines both stocks and bonds in its portfolio. Hybrid funds invest in a mixture of equities and fixed-income securities.
A stock split divides each share into multiple shares, increasing the share count and proportionally adjusting the stock price. In a 2-for-1 stock split, each share splits into two, doubling the share count while halving the stock price.
Investing works by putting your money into assets like stocks and bonds with the goal of growing your wealth over time, though it comes with the risk that you could lose money.
Yes, 529 plans owned by parents or students count as assets for financial aid, possibly reducing need-based aid. Withdrawals from grandparent-owned plans don’t affect aid but are considered student income.
A 529 college savings plan can cover tuition and books for studying abroad at eligible institutions, but not travel, insurance, or living expenses. Consult a Registered Representative to maximize tax benefits.
Anyone can contribute to a 529 college savings plan, even if they are not the account owner. This allows grandparents, relatives, friends, and others to gift money to a child's college fund.
Diversification, calculated risks, small investments, and multiple retirement options debunk common investment myths about needing lots of money, performance guarantees, 401(k) exclusivity, gambling, and individual stocks.
To pick a mutual fund, start by reviewing your investment goal and considering performance benchmarks. Then, try to minimize costs, consider diversification, and check the management experience.
Four ways to start investing with little money are 401(k)s if offered by your employer, IRAs which allow annual contributions up to $7,000, taxable investment accounts that offer flexibility, and savings accounts that provide FDIC insurance.
Compare 401(k) hardship withdrawals and loans: one may trigger taxes and reduced contributions, the other affects investments and cash flow. Consider alternatives and consult a professional for long-term goals.
Bonds are debt investments where investors lend to companies or governments for a fixed term and interest, though values can fluctuate and lower-rated issuers carry higher risks.
Mutual funds pool money from multiple investors to buy a diversified mix of stocks, bonds, or other assets, with profits shared among investors after fees.
Understanding basic investment terms is key to making informed financial decisions and navigating the world of stocks, bonds, and other investments confidently.
Some ways to invest after college is contributing to a 401(k) or Roth IRA, using a brokerage account, and taking advantage of any employer matching contributions.
Buying term and investing the difference means purchasing affordable term life insurance and investing the saved premium amount in other financial instruments to potentially grow wealth over time.
A diversified portfolio is a collection of investments spread across various asset classes, such as stocks, bonds, and alternative investments. The goal of diversification is to help manage risk by avoiding putting all your money into one type of investment.
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