American Capital LLC
42548 Park Street
Portland, ME 04103
High Risk Package
This package involves investing in stocks and corporate bonds. This is much riskier as profitability is dependent on the companies success. It is likely that the company will run into problems or other economic value will affect the value of a stock. Corporate bonds are generally less risky because bondholders are paid off first if the company encounters financial problems.
The returns on stocks and bonds are not guaranteed and tend to fluctuate more than other investments. Regardless, stocks provide a higher return over time and most other investments. When investing in stocks and bonds, diversification is a good way of maximizing return while limiting risk. Diversification involves spreading out money in a variety of assets, that way, a loss in one area can be offset by the gains in another.
Low Risk Package
This package focuses on low risk investments such as insured savings deposits and CDs. The biggest risk one would have is the loss of purchasing power due to inflation. We advise you not to put everything into an investment with a set rate of interest, as it might not be able to keep up with inflation.
The safest investments (Treasury Bills, short-term CDs, savings accounts) generally offer lower returns in favor of the safety. Usually the longer money is invested the more the return will be, as the risk also increased as time goes by.
A deposit offered by banks, saving and loans, and credit unions. This bond has a maturity date when it will stop gaining interest. CDs with longer maturity dates will pay more interest.
Certificate of Deposit
A form of deposits offered by banks, savings and loans, and credit unions. CDs have a maturity date when the investor will receive the principle back with interest. A CD with a longer maturity will pay more interest.
These bonds are issued by state or local government and are designed to fund government projects. Upon maturity the buyer will be repaid at least what he put in, making it another low risk investment.
loans with maturity time of up to 10 years. The money borrowed with treasury bills helps keep the government running, and are almost risk-free because they're backed by "full faith and credit".
Money Market Mutual Funds
Allows an investor to own a variety of short-term assets. These funds typically give higher yield than bank accounts, but provide the same level of flexibility. These funds are closely regulated and safer than CDs.