Sometimes filling out an application necessitates disclosing one’s assets. Or if you are young, you may be starting a portfolio and determining whether stocks, bonds, annuities or mutual funds are best for you.
Your assets here do not refer to your various great qualities but to that which has commercial or exchange value owned by a business, institution or individual. Those as a collection of investments create a portfolio.
If you choose to invest in annuities, you are selecting either immediate or deferred returns. As opposed to a life insurance policy, payable on death, the annuity can provide payment during your lifetime. The immediate allows you to deposit a certain amount, and you will then get monthly premium payments. You can contribute on a regular basis to a deferred type, and then you can take from it later.
If you are more of a risk taker, you might choose to invest in stocks, a security that represents an ownership interest in a corporation.
When the market’s status is displayed on television or the internet, you may see the Dow, or Dow Jones Industrial Average (DJIA). This is the widely followed price-weighed index of 30 of the largest, most widely held U.S. stocks.
You may also see NASDAQ reported. This is the National Association of Securities Dealers Automated Quotation, also called the “electronic stock market.” This high-tech composite index measures the performance of more than 5,000 U.S. and non-U.S. companies traded “over the counter.”
The NYSE (New York Stock Exchange) is the oldest and largest stock exchange in the U.S., founded in 1792. This is where you will find industrial companies.
The S&P is the Standard & Poor, which involves small companies’ stocks.
Rather than ownership, the bond is a form of debt issued by a government or a corporation. In exchange for a sum of money lent by the buyer of the bond, the issuer promises a specific interest at stated intervals for a specific time. At maturity, the issuer repays the amount borrowed.
If you deal with mutual funds, you have an investment company registered with the SEC that pools investments of multiple individuals into stocks, bonds or other securities.
Oh, yes, the SEC is the Security and Exchange Commission, an agency created by Congress in 1934 to regulate the securities industry to help protect investors.
If you are wondering why these terms are part of “Say it Right,” pause for just a moment. How could the words you use or understand have more value than those that are used to relate and clarify your and your family’s security? Though these are only some basics, the terminology you use and hear regarding your funds may make or break your safety net. Would you like to look at more specifics? If so, send an email.
— Sandi Ekberg taught high school English in Medford for 30 years. If you have grammar questions, email her at ifixgrammar@charter.net.