A blue chip stock is a very large company or business with an incredible reputation. These are well-established, well managed, and financially capable that is run and operated with so many years. Blue Chip stocks have the highest market capitalization which is generally in billions. Also, blue chip stocks are well known and popular among stock market investors since they have the full potential to grow and at the same time, investors gain more profits.
A mutual fund is an investment vehicle that pools money from different investors (individuals, groups, organizations, companies) and invests them in different securities (stocks, bonds, commodities) for the purpose of gaining profit. mutual funds are offered by companies instead of banks. Also, mutual funds is extremely a safe investment since it is regulated by the Securities and Exchange Commission (SEC).
If you are planning to invest in stocks, the very first thing you have to do is to decide and plan what stock broker you will choose. A stock broker is very important because they will be the one to handle and execute all your transactions. When you buy or sell a single or multiple stocks, your stock broker is the one to do it for you. Read this post to learn more on the best stock brokers you can choose in 2020.
Stocks basically represents your shares of ownership in a company or corporation. Thus, if you buy stocks, you are entitled to be a shareholder or stakeholder of that corporation. On the other hand, stock market is simply the place where you buy and sell shares of stock of a publicly listed company. Stock market is definitely very risky and volatile. Here, you will be dealing with two kinds of risks. The first one are risks that are very common in the market while the second risk is due to ignorance.
Bonds are simply loans. When you invest in a bond, you lend your money to a government, corporation, or organization. A bond is issued with a specific face amount or popularly known as principal. When you invest in a bond, it will pay you a certain rate of interest rate ranging from 5% to 30% annually depending on the type of bond. Usually, interest rates are paid to investors once or twice a year.