Beginner's Resources On How To Start The First Investment

Investment is the placing of funds for the purpose of getting some income return and/or an increase in the invested principal. Return in the form of interest constitutes a rental for the use of the money and as such has been socially acceptable for thousands of years; indeed, tablets and inscriptions from ancient Egyptian and at a specified rate was a common business transaction even in those days. The modern world contains many investment media; among them are real estate, life insurance, commodities, bonds, stocks, and savings accounts.

All forms of investment have in common the following characteristics : (a) the amount invested, called the principal; (b) the rate of return, usually stated as an annual rate in percent; (c) the degree of risk; (d) the liquidity, or how quickly the investment may be converted into cash; (e) the capital gain, or increase in the value of the principal, sometimes termed the grown factor. Assuming a certain principal amount, the other four factors vary widely with the nature of the investment.

Featured Investing Beginner Articles

In order that any investment program shall be reasonably certain of success, there are a number of features that must be evaluated and considered. It is only natural that we consider them carefully, because the program itself must be tailored to the needs of the individual.

The first factor is the age of the individual investor. A man between twenty-five and thirty-five years of age would have an entirely different set of investment objectives from a man in his fifties. The younger man will look forward to the building of an estate throughout the years, as his earning power increases. He probably will be more interested in "growth" securities, while the older man may place great emphasis on safety and current income...

Featured Common Stock Articles

Common stock is issued by certificates, each one of which indicates the number of shares owned and by whom owned. In case of transfer, an assignment form on the back of the certificate must be filled out, witnessed, and forwarded to the company secretary or his assistant; the old certificate is canceled and the stock then transferred upon the books of the company to a new owner, for whom a new certificate is then issued.

Sometimes the common stock is divided into two classes: the voting stock (whose owners have a voice in the conduct of the business) and the nonvoting, whose owners share in all the risks of ownership without having any voice in the conduct of its affairs. The use of this latter form has now fallen into disfavor, since it is felt that one who assumes the full risks attendant upon ownership should also have some voice in the enterprise.