Trying to Time The Market
To time the market, you have to be right not once but twice, knowing both when to get in and when to get out.
Treasury Inflation-Protected Securities (TIPS)
TIPS are a type of security offered by the U.S. Treasury that provides protection against inflation. When you purchase a TIP, you will receive the interest payments semi-annually and you will at least receive your original principal amount at maturity, however unlike a regular Treasury bond, the interest and redemption amounts are tied to inflation rates.
Preferred Stock
Preferred stock is a hybrid security, meaning it is not a stock or a bond. Preferred stock is an equity security that shows ownership in a company. In most cases, preferred stock is offered to the public by the issuing company to acquire another company, or to improve capital and expansion at a time when stockholders and the public are not buying common stock. Unlike common stock, preferred stock does not fluctuate very much in price.
Mortgage Backed Securities
Mortgage-backed securities are fixed-income investments that allow investors to purchase an interest in a pool of mortgages. These securities are available from three primary sources.
First Financial Steps Part 2: Investing
The first place to start investing is your employer-sponsored retirement plan, but if you don’t have one or not eligible yet, there are other options.
Basics on Stock Symbols
All securities listed on either the New York Stock Exchange, the American Stock Exchange, or the NASDAQ system are identified by a unique stock symbol or ticker symbol. The stock ticker symbol appears on the “ticker tape” that scrolls across the bottom of most financial news programs whenever the stock is traded. A stock’s symbol also provides the investor with some basic information about the company.
Managing Your Liquidity
The risk of investing in bonds depends on the type of bond, the quality and the holding period.
Tracking Stocks as an Investment
A tracking stock is common stock issued by a parent company that tracks the performance of a particular division of the parent company. However, tracking shares don’t always represent ownership interest in the underlying company.
Annuities
Annuities are generally sold as a way to accumulate assets for retirement (with taxes deferred until money is withdrawn), and/or as a convenient method for delivering income during retirement. They generally come highly recommended by sales agents due to the large commissions the agents receive.
Why a Company May Choose to Issue a Tracking Stock
Essentially a tracking stock is nothing more than a stock that the company who issues it HOPES will be viewed by the market as its own company to command its own valuation. Unlike a full spin-off to investors, the company which is being ‘tracked’ is oftentimes controlled by the mother company’s board and senior management, and is 100% owned by the mother unless a portion was sold to the public in an IPO.