Fundamentals of Investing

Investing is simply the process of acquiring assets that you hope will grow in value. Investments can include owning a home, owning a business, owning real estate, or having money in savings accounts and CDs at a bank or credit union. 

Some basics

There are several ways you can own investments. Most people start out with individual accounts set up at brokerage firms or mutual fund companies, in their IRAs and through their company retirement plan. If you invest through an individual account, the income (dividends, interest and capital gain distributions) from the account is taxable. If the investments are within an IRA or a qualified plan, you will probably not owe any tax on the returns until you take funds out.

Some common sense rules

Understand that there are risks with investing. When you make the decision to invest, you are leaving the world of insured and guaranteed returns found with savings accounts and CDs from a bank or credit union.