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Understanding your options

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Once you've opened an account, you'll want to explore your investment options and the risk they carry. Here are some of the most common investments you'll need to consider:

  • Stocks are a share of ownership in a company and can be purchased individually for a share price or through mutual funds.
  • Bonds are loans taken out by a company or governments and typically pay a certain interest rate.
  • Mutual funds are a bundle of investments that include assets such as stocks and bonds. Some of these funds are professionally managed and help to remove the burden of picking individual stocks or bonds. Mutual funds are traded once a day after the market close.
  • Exchange-traded funds, or ETFs, similar to mutual funds, also include a bundle of assets, but trade on the stock exchange throughout the day and are bought for a share price.

It's important to remember to diversify your portfolio with a mix of asset classes to help balance out risk.

Mutual funds and ETFs, for example, are options that can provide first-time investors a chance to diversify. While investing in safer bets, like bonds, are a good way to set off riskier investments in things like real estate investment trusts (REITs).

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