Newsweek says that financial illiteracy is a bad thing: “Sadly, we lack financial awareness and continue making mistakes with money every day.”. Nils Larsen Manager gives an overview of investment terms to help you make informed decisions.
A stock represents part ownership of a company. Buying one share makes you a stockholder or part-owner of a company. Because of this, you’re entitled to the company’s profits. Stocks are also called shares or equities. The more stocks you own, the more dividends you’ll earn.
Another way of boosting your income is by purchasing bonds. Here, you lend money to a company or government that’ll pay you back with interest at a specific time. If the government wants to raise money for a particular project, it may issue treasury bills. When you buy them, you’re loaning the government your money.
If you own some real estate and then decide to sell it, you’ll pay capital gains tax after your profits. So, when an investment (property) value is higher than the original purchase price, you’ll pay capital gains tax.
It’s a pool of funds from a group of investors to purchase securities like stocks, bonds, etc. As Nils Larsen Manager notes, mutual funds are managed by a fund manager or a brokerage firm that makes decisions about the fund’s investment.
According to Nils Larsen Manager, a brokerage firm is a financial institution that helps you buy and sell securities such as bonds, stocks, and funds. It carries out research, market analysis, and pricing information of different securities. As a result, it charges a commission fee on trades.
Asset allocation allows you to balance investment risk by distributing assets in stocks, bonds, and cash, says Nils Larsen Manager.
An expense ratio arises when paying annual fees, including management fees and administrative fees, to a brokerage firm for managing your investment.
Nils Larsen Manager explains that you should avoid putting all eggs in one basket to spread investment risks. Diversification is putting in a mix of investments to minimize overall risks.
A prospectus is a legal document that gives you details about a public company. It’ll show you its performance on which you can base your decision to invest in it or not.
With over two decades of experience in the financial sector, Nils Larsen Manager is an accomplished financial portfolio Manager. He has a vast knowledge of various investments, such as stocks, bonds, mutual funds, exchange-traded funds, and more. In addition, Nils Larsen Manager can tailor-make investment products according to your risk tolerance, goals, and objectives.
When Nils Larsen Manager is not at work, he is at home with his family. He has two boys and a German Shepherd that he spends a lot of time with. His family loves surfing, hiking, fishing, and spending time outdoors.
The information given here is for educational purposes only.