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401(k) plans

Plan is a defined contribution plan where an employee can make contributions from his or her paycheck either before or after-tax, depending on the options offered in the plan.

Diversification Options: there are many different way to diversify your distribution of money to multiple different options.

Risks: Virtually No risks, just saving your money.

Rewards: Safe retirement money that isn't in danger.

Total Risk: Very Safe investment.


You get paid at a steady rate or investing in a company

Diversification Options: Because bonds generally may not move in tandem with stock investments, they help provide diversification in an investor's portfolio.

Risks: Keep in mind that the market value of zero coupon bonds fluctuates more than the regular corporate bonds; therefore, they may not be suitable for investors with liquidity needs.

Rewards: They seek to provide investors with a steady income.

Total Risk: Safe Investment

Certificates of Deposit (CDs)

is a time deposit, a financial product commonly sold in the United States and elsewhere by banks,thrift institutions, and credit unions.

Diversification Options: the rate is guaranteed for the term of your choice. Dividends are paid quarterly. Certificates earn a higher rate of return than regular shares!

Risks: It comes down to interest-rate risk. If rates go up, you could still be locked into the lower rate.

Rewards:If interest rates go down and your existing CD account with relatively high interest matures, you may have to roll over the CD at the lower rate.

Total Risk: Low-Risk, Not risk free.

Corporate bonds

A debt security given by a corporation and sold to investors. Money from this bond usually comes later, but in greater quantity. The company's physical assets may be used as collateral for bonds.

Diversification Options: Diversify when investing in this Bond

Risks: You have to worry about Credit Risks. That is why its important that investors of corporate bonds know how to assess credit risks and its potential payoffs.

Rewards: You can gain a real good asset if you examine the credit spread carefully enough.

Total Risk: Very-Risky

Municipal Bonds

Bonds that are used by local governments. Mostly used in the US, many cities, states, redevelopment agencies, and school districts use these bonds to improve. This market is unique for its size, liquidity,legal and tax structure.

Risks: You have to deal with Credit Risk "When the issuer is unable to meet its financial obligations". Also the there is Interest-Rate Risks "If interest rates in the marketplace rise, the bond you own will be paying a lower yield relative to the yield offered by newly issued bonds."

Rewards: You get the full amount you invested back along with the interest payments over a predetermined period.

Total Risk: Moderately Risky

Money Market Mutual Funds

These funds are an open-ended mutual fund that invests in short-term debt securities. They are regarded as being safe as bank deposits yet providing a higher yield.

Diversification Options:

Risks: Purchasing power Can Suffer, Expenses can take a toll, and fees can vary in their negative impact on returns.

Rewards: You get a solid amount of money back.

Total Risk: moderately

Junk Bonds

Bonds that are rated below investment grade, these come as a higher risks but typically pay higher yields then others.

Diversification Options: diversify often, you don't want to lose all of your money.

Risks: Chance you will never get your money back. It also requires the analytically skills, particularly knowledge for specialized credit.

Rewards:They have high returns if everything works out, you can get a lot of money from the right investment.

Total Risk: High Risk

Government Savings Bonds

Bonds offered by the U.S Treasury in order to help with the U.S's borrowing needs. Considered one of the safest bonds because they are back by the U.S.

Diversification Options:

Risks: Perhaps the biggest risk you face when buying government savings bonds is inflation risk. Most savings bonds have interest rates that are pegged to other government securities and are not adjusted for inflation (the exception is Series I bonds, which are adjusted semiannually for inflation).

Rewards: Small increase in mone

Total Risk: Low-Risks

Treasury Notes and Bonds

A U.S. government debt security with a fixed interest rate with the maturity between one and 10 years. The bids can be separated into competitive or noncompetitive bids.

Diversification Options:



Total Risk:

Treasury Bills

A short term obligation backed that U.S government. They are sold in denominations of $100 but can shoot up in price to a maximum purchase of $5 million and commonly have maturities of one month.

Diversification Options: affordable for many people, so high diversification.

Risks: You might not get all your investment back if you cash out before your maturity date.

Rewards: Small money increase, since it so safe you don't get a lot of money.

Total Risk: Very Safe


One of the principal asset classes with two forms. On a company's balance sheet, the amount of the funds contributed by the owners (the stockholders) Plus the retained earnings.

Diversification Options: High allowance for diversification.

Risks: You have to deal with Equity Risks "equity in companies through the purchase of stocks" The measure of risks used in a particular investment.

Rewards: You get money for relatively low investments, not a lot, but money is money.

Total Risk: Moderately risky.

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