Thursday, May 20, 2010

Municipal Bonds Are a Good Way to Start an Investment Portfolio

Many people do not realize that the best way to make money is through investments. An investment is a way for your money to make you more money. What could be better than that? There are many different types of investments and there is no one best type because they all have their advantages and disadvantages. If you are interested in making a financial investment, you should do research on the Internet and talk to a financial advisor about your concerns.

The two major types of investments are stocks and bonds. When you buy stock in a company, you essentially own a small portion of the business. If the company does well, then you have a good investment. When you purchase a bond, you do not own a part of a company; you are simply loaning money to them with the agreement that they will pay you interest on the amount they borrow from you. Some people prefer to invest in stocks because they can have a huge return on investments, but people who prefer less risky investments enjoy bonds because the amount of money you will receive is determined ahead of time, and you will receive your initial investment back when the bond reaches maturity.

If you are interested in a minimal risk investment, then municipal bonds (munis) are a good way to start building an investment portfolio. Muni rates fluctuate according to the economy, but you will have a fixed interest rate when you purchase the bond. Municipal bonds are issued by companies or the government as a way to pay for projects that do not have tax funding. They can be a great investment because they pay interest every six months and can have a term between one month and over ten years.


Sherry said...

since my dad retired he always think of what he can invest

redamethyst said...

bonds are a good way of investing

Sherry said...

my dad needs to check his bonds as he told me that he need to fil up some forms