GUIDE TO UNDERSTANDING MONEY INVESTING

Contents

1 Money
2 FED’s role
3 measuring economic health
4 Stocks
5 Bonds
6 Mutual fund
7 Future and option

Money

In the beginning was barter.
Metal becomes the standard.
The origins of paper money is china.

FED’s role

1 regulator
2 barter
3 lender
4 auditor
5 controller
6 guardian
7 administrator

measuring economic health

jobless claims
durable goods
housing starts
new factory order
consumer confidence
unemployment rate
producer prices
consumer credit

CPI(consumer price index)

Stocks

Stocks are prices of the corporate pie.
When you buy stocks, or shares, you own a slice of the company.
[common stock] [preferred stock] Dividend payment has priority over common stock.
Dividend don’t increase if company prosper.
Going public
42% of adult Americans own stocks.

The stock market
NYSE, AMEX, NASDAQ

Bonds

Bonds are loans that investors make to corporations and governments.
The lenders earn interest, and the borrowers get the each they need.
Corporate bond
Municipal bond
T-bond, T-notes
T-bills
Agency bonds

Mutual fund

Focused funds
Index funds
TAX-FREE funds
Sector funds
Green and other conscience funds

Future and option

Future and option are complex and volatile but also useful investment.
Hedge and speculator, they perform the important function of stabilizing price.