Types of Investment Funds – Open-End & Closed-End Funds and UITs

investingInvestment companies were created to invest in a range of professionally managed securities or investments with the intent of accomplishing specific financial goals, such as capital growth or income. They have grown to become one of the main providers of asset management for millions of investors in the United States and around the world.

There are three main types of investment fund companies: open-end funds, closed-end funds, and unit investment trusts. But while they differ slightly in structure and characteristics, each provides investors with professional management and diversification, both inside and outside of IRAs and employer-sponsored retirement plans.

Open-End Funds

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Employee Stock Options Explained – Plans, Taxation, Pros & Cons

employee stock compensation can benefit employees and employers alikeThere are three main forms of compensation that most corporations pay to their employees. The primary type of compensation, of course, is cash, which comes in the form of hourly wages, contract income, salaries, bonuses, matching retirement plan contributions, and lifetime payouts from defined benefit plans.

The second method of compensation comes in the form of benefits, such as insurance (life, health, dental, and disability), paid vacations and sick days, tuition and child care assistance, and other miscellaneous perks, such as company cars and expense accounts.

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Investing in Utility Stocks With High Dividends – Pros & Cons

utility stocks often do well during bear marketsInvestors seeking decent returns on their money with minimal volatility have been frustrated in recent years with the low rates from CDs and treasury securities. Many have begun exploring other asset classes, such as corporate bonds, fixed annuities, and preferred stock.

But there is another alternative that has been around for decades, one that has paid steady dividends with moderate risk. Utility stocks have been one of the bellwether sources of dividend income for conservative and moderate investors since the early 1900s.

Characteristics of Utility Stocks

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What Are Brokered CDs & Market-Linked CDs – Pros & Cons

banker coupleConservative investors who are disappointed with the mediocre rates of interest offered on their local bank’s CDs may want to explore the world of brokered certificates of deposit. These unique instruments resemble those that are sold in bank lobbies in some respects, but there are critical differences between them.

Brokered CDs can be a valuable addition to any fixed-income portfolio as long as the purchaser understands how these instruments work – and their potential pitfalls.

What Is a Brokered CD?

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5 Low-Risk Investments That Offer High Returns

woman risk rewardConservative investors have been frustrated in recent years because low interest rates have left guaranteed instruments yielding virtually nothing. And while rates will undoubtedly rise again at some point, guaranteed instruments will never outpace inflation.

This creates a dilemma for many investors who seek a decent return on their money, but don’t want to risk losing their principal. However, there are several investment options paying higher rates of interest than CDs and treasury securities with a very reasonable amount of risk. Those who are willing to explore some of these options can significantly increase their investment income without having to lie awake at night worrying whether their money will still be there in the morning.

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What Are Floating Rate Funds – Pros & Cons and Examples

floating rate mutual fundMany types of mutual funds are primarily designed to pay income to investors in various forms. Some income funds invest in bonds, while others derive income from mortgages or stocks that pay dividends, such as utility and preferred offerings.

Another class of income fund also exists: the floating rate fund, also known as a prime rate fund, bank loan fund, or loan participation fund. Floating rate funds are one of the newer types of income funds to appear on the market and have gained quite a following in recent years.

What Is a Floating Rate Fund?

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Non-Qualified Retirement Plan – Definition, Benefits & Examples

non-qualified savings planMillions of employees save for retirement by deferring a portion of their compensation into an employer-sponsored, tax-deferred savings plan. The majority of these are known as qualified plans and fall under the jurisdiction of ERISA guidelines, which means they are subject to certain limiting requirements.

For example, these requirements can pertain to the type and number of employees who participate, as well as the amount of money that is placed in the plan by rank-and-file employees as compared to executives and owners.

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How to Become a Financial Advisor – Career Challenges & Rewards

financial advisorIn generations past, the financial marketplace consisted of insurance agents who sold whole and term life insurance, stockbrokers who pitched individual stocks and bonds, accountants who prepared income tax returns and did corporate accounting, and bankers who offered customers security with FDIC insurance and safe-deposit boxes.

Today’s modern financial marketplace has substantially blurred the distinctions between these traditional professions, and financial advisors today are required to wear numerous hats in order to effectively do their jobs. But for those who can meet the many challenges it presents, the financial advisor career path promises substantial rewards.

What Is a Financial Advisor?

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How to Become a Licensed Stockbroker – Career Challenges & Rewards

becoming a successful stockbrokerFrom the time that traders gathered under a buttonwood tree on Wall Street until the 1970s, stockbrokers were known primarily as salespersons who got rich by recommending stocks and bonds to wealthy speculators. And while many brokers still do this today, the role of stockbrokers has evolved and expanded considerably over the past few decades. Those who decide to explore this career path will face many challenges, but can also reap substantial monetary rewards.

There are a number of steps involved in becoming a successful broker, and a plethora of career paths one can take. Your path may begin with your college education.

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Options Industry Council (OIC) – Options Trading Education

options industry councilThe complex world of options trading can provide knowledgable investors with quick profits, regular income, and protection against losses. Unfortunately, many investors are lured by the quick-profit potential and choose to merely dabble with these instruments without knowing what they’re doing. This often leads to substantial losses.

In order to mitigate this effect and better prepare investors for the ups and downs of options investing, the Options Clearing Committee (OCC) created and sponsors the Options Industry Council (OIC). The OIC seeks to educate investors about the risks, mechanics, and characteristics of options as well as specific strategies and how to use them.

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