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Understanding Common Securities and Stock

There are a lot of different investment classes out there that you can invest in. With a little bit of money and a variable amount of time put into research, you can make a substantial return on your money. Of course, there is a lot to learn that you should carefully look into before you plunk down the money you worked hard to earn. The following are four very useful pieces of a solid investment strategy. You may use a couple of them or all of them, and still do fairly well. Just be careful how much you put into each asset class.

Common Stocks

Common stock is the most basic form of investment many people think of. While known of by a lot of people, stocks are not something most people know much about. A share of stock is a small piece of ownership in an underlying company. This ownership interest may be sold, it may entitle the owner to dividends from the company's profits, and it even gives the owner the ability to vote on what the company does. Of course, if the company goes bust, shares of stock become totally worthless.


The foreign exchange or Forex market is the trading platform for global currencies. Using the Forex market, a person can leverage their money through borrowing to trade one currency for another. The upside is that this allows hefty profits if the trader does well. The downside is that with all of this borrowing, it is possible to end up losing more than you put in. Success and failure are possibilities you need to consider carefully.


A commodity is a basic unit of goods, such as pork bellies or barrels of crude oil. When you buy a commodity, if you hold onto it long enough it will actually be delivered to you. If you sell it, you have the chance to make a nice profit. You can also buy or short sell futures, where you bet on whether the price of any given commodity will rise or fall over a set period of time. Consider that there are many commodities, and each one is a functional item with a lot of factors going into its value. Tread cautiously when you start out.

Money Markets

Money market accounts are reasonably safe investments that carry a guarantee from the FDIC. A money market makes its interest from the loans banks make to one another. While safe, they also are not very high yielding.



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