Many conservative investors use bonds to provide a fixed income. They buy a bond when it’s issued and hold it for one, three or ten years, expecting to recieve regular, fixed interest payments until the bond matures. When interest rates fluctuate, as they do in certain economic conditions, some investors try to make money by trading bonds rather than holding them. Bonds that are issued when interest rates are high become increasingly valuable when interest rates fall. (more…)

Bonds are loans that investors make. The borrowers get the cash they need while the lenders earn interest. Bonds are issued by large corporations and governments to raise funds for their projects. Bonds appeal to many investors because they promise to pay a set amount of interest on a regular basis. That’s why they are called Fixed-Income securities.Another good thing about Bonds is that the issuer promises to repay the loan in full and on time. So bonds seem less risky than investments that  (more…)

There is another strategy to make money with stocks and this is called short selling. If you sell short, it means you’re expecting a decline in value of the stock so you can make money. Here how it works: To sell short, you borrow shares from your broker, then sell those shares and keep the money. Then you wait, expecting the price of the stock to drop. If it drops, you buy the shares at the lower price and return them to your broker. (more…)

Here’s how investors make money with stocks. One way is through capital appreciation, or making a profit by buying stock at a low price and selling it at a higher price. Wise and successful investors always follow this simple rule: “BUY LOW AND SELL HIGH”.

For example: if you buy 1000 shares of Mcdonald’s at $50/share(total investment of $50,000)and after three months the price moves up to $75/share and you sell it(total of $75,000), you have earned a capital gain of $25/share or $25,000. It’s a 50% profit!

On the other hand, if you buy 1000 shares of Mcdonald’s at $50/share(total investment of $50,000) and if the share price moves against you and you sell it for $25/share(total of $25,000), you have lost $25/share or $25,000. It’s a 50% loss!

Common stocks or sometimes known as ordinary shares is the most typical way to invest in a corporation. The shares are issued initially by the corporation and sold to individuals, mutual funds, Banks and other financial institutions. Investing in common stocks or ordinary shares offer no guarantees but in the U.S, in other countries and here in the Philippines, stocks have produced better returns than other invesments. It is also possible to lose an entire invesment if you’re not careful in choosing stocks. Common shareholder may make money through capital appreciation and dividends.