investments

Bonds are a form of indebtedness that is sold to the public in set increments, normally in the neighborhood of $1,000. In return for loaning the debtor the money, the lender gets a piece of paper that stipulates how much was lent, the agreed-upon interest rate, how often interest will be paid, and the term of the loan.

Stocks is Ownership of a corporation indicated by shares, which represent a piece of the corporation'sassets and earnings.

Mutual funds are pools of money that are managed by an investment company. They offerinvestors a variety of goals, depending on the fund and its investment charter. Some funds, for example, seek to generate income on a regular basis. Others seek to preserve an investor's money. Still others seek to invest in companies that are growing at a rapid pace. Funds can impose a sales charge, or load, on investors when they buy or sell shares. Many funds these days are no load and impose no sales charge. Mutual funds are investment companies regulated by the Investment Company Act of 1940. Related: open-end fund, closed-end fund.