This tutorial will cover seven categories of basic investing.
Before we delve into those categories, we will briefly discuss the basics of your investment foundation. An important part of understanding basic investment concepts and tools is to understand that your investment portfolio is built very much like a house – foundation first. In the world of investing, your foundation is your basic savings or available capital.
Create a Solid Foundation
Financial planners regularly advise their clients to begin any plan for investment with a reserve of at least six months capital. This should be the minimum amount that you will need to pay every bill and every need your family has for six months. This foundational reserve should be invested in vehicles that have a low return such as bonds, CDs or savings accounts. The harder it is to access the money, the more secure your foundation is because you will not dip into it quickly, thoughtlessly or easily.
Armed with this basic information, you are now ready to venture into looking into the various aspects of investing that will give you a basic understanding of the money world.