Category: Other Harmful Investments

What is real estate? We’re familiar with houses, condominiums and other abodes as living options. As investments, you can buy other properties same as you’d buy a home, with deeds, mortgages, closing costs; the whole nine yards. You can also invest in…

What is a private placement? A privately placed security is one that does not get offered to the public when first issued. Private issues of stocks and bonds are usually offered to a limited number of large investors such as mutual funds…

What is an option? An option is a contract between two investors wherein one pays money to the other in exchange for the right to buy or sell something at a given price before a set date. A call option grants the…

What is an initial public offering (IPO)? An initial public offering (IPO) is the first public sale of a security. IPOs occur all the time in the debt markets as governments and large corporations who borrow money usually do so by issuing…

What is a hedge fund? A hedge fund is a legal entity which invests money gathered from its partners or shareholders – usually large chunks from wealthy individuals and/or institutions. Casual observers often confuse hedge funds with mutual funds, thinking the former…

What is a future? A futures contract, often abbreviated as ‘future’, represents the purchase or sale of something with a future settlement date. When you buy a future, you own the item with all the opportunity for gain and risk of loss.…

What is an exchange traded fund? Similar to mutual funds, exchange traded funds (ETFs) are companies through which assets of shareholders are pooled to achieve pro-rata ownership of a diversified portfolio. Usually an ETF will seek to replicate the performance of a…

What is an annuity? An annuity is a contract through which you pay money now to receive a stream of income in the future. While some begin payments shortly after the contract is signed and paid for, most pay only after much…

What is a derivative? Derivative is a catchall term for an instrument that is not like a stock or bond itself but rather a contract with rights to purchase or sell something of value at some point in the future. Some derivatives obligate…

What is a commodity? Briefly put, a commodity is stuff. More precisely, it is a contract for the future delivery of stuff. Rarely do investors take delivery of cattle or piles of wheat. Contract prices move up and down according to market…