Miracle Gro© Investments
Who says money can't grow on trees?
3901 Route 1
Solon, OH 44139
Miracle Gro© is not only your favorite plant fertilizer, but now we've expanded to financial advisement! Here at Miracle Gro© Investments, we want to help you plant the seeds of investment and watch them grow up big and strong. Here are some things to keep in mind when choosing a package:
Diversification & Risk v. Return
Diversification is the strategy of investing your hard-earned money into a variety of sources. This is to lower the risk of all of your investments failing at the same time, leaving you destitute. An investment portfolio with more diverse choices (with different levels of risk, as well) lowers the risk of loss and increases higher returns on your money.
The other thing to keep in mind is that risk and return have a directly corresponding relationship. As the rate of return rises, so does the chance of failure. This should always be kept in mind while investing. Miracle Gro© Investments has taken the time to present different package options, ordered by the level of risk and return.
The Sit-and-Wait Package
Certificate of Deposit (CDs): CDs are highly recommended for those investors looking for a stable, low-risk place to invest money. Money put into the Certificate of Deposit cannot be taken out without penalty, and the CD continues to grow with interest until its maturity date.
Money Market Mutual Funds: These are very low risk, low return investments that allow an investor to easily retrieve their money. The funds are always worth $1, but the rate of interest changes and they have no fees attached to them. They are generally very safe, but it is important to be aware that they are not covered by federal deposit insurance.
The Bonds Package
Bonds: When a company or government needs funds, they will sometimes issue bonds. When these bonds are bought, the entity receives the money to use for a defined amount of time at a set interest rate. Bonds that are issued for a longer time span usually have a higher interest rate, but they also have a higher chance of lowering value. However, bonds tend to be less dangerous than stocks because if a company goes bankrupt, bond owners are paid before stock owners. When investing in bonds, we recommend you look at the length of time of the bond as well as how sensitive it is to change.
Municipal Bonds/Government Savings Bonds: These are bonds issued by the state or national government. They are particularly attractive because they are usually tax free and have a very reliable return rate.
Treasury Bills/Notes/Bonds: Treasury Bills are very short term investments lasting no more than one year and are a good place to hold money when that money needs to be easily retrieved. They do not receive interest, but are rather bought at a lower amount than they are worth, and then the investor receives the full payment at the end. Treasury notes are used to pay longer term investments lasting under a decade, such as college tuition. Treasury Bonds are investments intended to last more than 10 years.
The It'll-Probably-Be-Fine Package
401(k): A plan in which an employer takes money from the employee's paycheck and puts it into an account, where the money is not taxed until it is used. The employee may also match the amount put into the account. Risks include the fact that there is no government insurance for 401(k) accounts, and rolling over to a different account when switching employers can be a hassle.
Corporate bonds: In exchange for lending money to a business, the bonds collect interest and can be sold on a secondary market. They are in our moderate risk package because their return depends on how well the company does; however, if the company's assets have to be broken down, bond-holders are paid before stock-holders.
Moderate Risk Equity/Stocks: When an investor buys a stock, they are buying a portion of that company and possible voting rights for decisions. Thus, if the company succeeds, the investor will get returns for their input. In the moderate risk stocks option, we will invest your money in stable companies that are likely to have a moderate return rate.
The Edge-of-your-Seat Package
Junk Bonds: These are essentially the same as regular bonds, except for the credit rating and risk of the investment. While a bond is lending money to a government or corporation with the expectation that they will pay the money back with interest, junk bonds involve lending money to borrowers with poor credit ratings that are desperate enough to promise a very high return rate.
The Cross-Your-Fingers Package
Higher Risk Equity/Stocks: We will invest your money into higher risk, but also higher potential for return stocks. There may be a chance of failure, but also a chance of great success.