So just what is investing anyway?
Say the word "investing" and people offer all sorts of disjointed commentary about mutual funds or internet stocks or IRAs.
But hold on...
Stocks, bonds, and mutual funds are only one part of the world of investing. Broadly speaking, investing is figuring out where to put your money, so you might protect and grow it until you need it.
But that's too broad. You need something that you can get your brain around.
A helpful starting point is a lil' thing I like to call the liquidity spectrum. Check out the definition of liquidity if you want. Then look at the simple graphic below about this concept.
But hold on...
Stocks, bonds, and mutual funds are only one part of the world of investing. Broadly speaking, investing is figuring out where to put your money, so you might protect and grow it until you need it.
But that's too broad. You need something that you can get your brain around.
A helpful starting point is a lil' thing I like to call the liquidity spectrum. Check out the definition of liquidity if you want. Then look at the simple graphic below about this concept.
Are you still saying "so what?" Well, let's look at each of the parts of the spectrum a bit more:
assets that are highly liquid, those that have medium liquidity, and those that are very illiquid.
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assets that are highly liquid, those that have medium liquidity, and those that are very illiquid.
Back Home Next