Topic 9: Financial Markets

The most attractive kind of financial assets to me are bonds and mutual funds. If I were to have the available money to invest with, I would invest it into bonds and mutual funds. Simply because bonds are the safest investment that will ever come around as it will never crash unlike the stock markets. The interest rates are average but it is always consistent and will never decline drastically. A person will always receive his or her money regardless of the economy. Moving on to mutual funds, although it may seem exactly the same as investing into stocks, it is not. Investing into stocks is doing it personally with no one else along with you. If you invest into stocks and you lose and you lose, only you lose and no one else will. The difference with investing in mutual funds is that the money invested goes to companies which also gather many other people’s money to be invested in stocks, bonds, short-term money-market instruments, other securities or assets, or some combination of these investments. Advantages of mutual funds include: having your investments handled by professionals and will be a lot safer than investing in socks by your self. Diversification is another benefit as this will really lower the risk of the investors because the company will spread the investments in a wide range of companies and industry sectors.