saving and investment portfolio

stocks

• An investment that represents shares of ownership of the assets and earnings of a corporation.
• Invested 20,000
• The average interest rate is 7%
• The risk is you can lose all of your money or even more than you invested
• Stock represents ownership of company
• Stock values can be unpredictable
• Open a stock by getting a stockbroker
• I chose this because of high risk high reward

Bonds

• is a debt investment in which an investor loans money to an entity which borrows the funds for a defined period of time at a variable or fixed interest rate.
• Invested 20,000
• 10% interest rate
• Risk of bond price falling and interest falling
• There is also credit risk and rating downgrades
• U.S department of treasury

Government Bond

• Government savings bonds are backed by the United States government, so there is little or no default risk.
• Invested 20,000
• 6% interest rate
• designed for little amount of years
• U.S department of treasury can open
• Very low risk

Certificate Deposit

• a certificate issued by a bank to a person depositing money for a specified length of time.
• 1% interest rate
• No risk in these at all
• Similar to a savings account
• Go to a bank or credit union to open one
• Invested 20,000

Saving Account

• Savings accounts are interest-bearing accounts at banks and credit unions.
• Invested 20,000
• .05% interest rate
• Only risk is risk of inflation
• usually have low interest rates
• are used to deposit small amounts of money and meet short-term goals

Diversification is important because of reaching long-range financial goals while minimizing risk.