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Investing is an excellent way to grow your savings, whether you’re planning for retirement or trying to build a nest egg to support your family. It’s recommended that you work with an accountant or financial advisor to receive proper investment guidance. But before you get started, it helps to know a bit about the options.

What Are Some Financial Investment Options?

1. Stocks 

Buying a stock equates to purchasing a share in a company that is publicly traded on the stock market. When the price of the stock you purchased goes up, selling it will bring a profit. However, if the stock price plummets and continues to do so, you will lose money if the value is less than the original purchase price of the stock. 

2. Bonds 

accountantBonds can be issued by companies or by the government. After buying a bond, you’ll need to keep it for a certain period before earning money. When that time passes, you’ll receive the purchase amount plus interest. There’s less risk involved with bonds when compared to stocks because there’s less volatility. However, the rate of return is also lower. The right accountant can advise you on which bond is the best investment.

3. Certificates of Deposit

Certificates of deposit entail even less risk than bonds. In this case, you provide money to a bank, which holds that money for a set period. During this time, interest accrues. The only downside with certificates is that you won’t be able to access the money until the period is up. If you withdraw early, you’ll be subject to a penalty. 

4. Mutual Funds

Mutual funds entail investing in stocks and bonds, but your money is combined with that of many other investors. A mutual fund manager can select investment vehicles for clients, or it can be passively managed. That means it will follow the movements of the Dow Jones or S&P 500. 

 

Getting the right financial advice from a knowledgeable accountant is crucial to making wise investment decisions. Bergamo Tax & Financial Services in Watertown, CT, helps clients make smart financial choices. They’ll help you weigh the risk against the benefits of specific investment tools, and provide advice in areas such as estate and retirement planning. These accountants can also assist with tax preparation and provide financial services to local businesses throughout Waterbury, Middlebury, and Litchfield. Call (860) 274-1655 to schedule a consultation or visit their website for more information on their services. 

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