Introduction to investing 

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OCCU  -  03.13.2024

You know the importance of securing your finances. You likely learned from a young age the value of putting some money away for a rainy day and having a positive balance in your checking account at all times. 

But when you’re ready to do more for your financial future, investing is a great way to help make sure that you can live comfortably for years. Getting started can feel overwhelming, but you don’t have to be a financial guru to get the job done — though it does help to know one. 

Our financial experts are on hand to help you make the right decisions for your life. But before you get started, let us introduce you to some of the basics of investing so you can go in with the confidence you need to make smart and informed decisions.   

Watch Introduction to Investing | OCCU Investment Services on YouTube.

Types of investments 

Stocks & bonds 

Stocks are ownership in a business. Buying stock in a company makes you a partial owner. If the company does well, the value of the stock goes up. However, the stock market can fluctuate, and your stock has the potential to lose value.  

Bonds, on the other hand, are a loan to a company (or government). They have a set interest payment, a maturity date and a face value. While they are not risk-free, they are considered less volatile than stocks. But that also means the potential reward is less. Think of the old saying, the greater the risk, the greater the reward.

Stocks and bonds both have a place in building a strong financial plan. How much and what kinds of stocks and bonds to buy? That answer is different for everyone and depends on a person’s unique financial needs and goals.

Mutual funds and exchange-traded funds 

Mutual funds let you pool your money with other investors to “mutually” buy stocks, bonds and other investments. The fund may have a narrow objective, such as the auto sector, or it may have a broader objective, such as large-cap stocks. 

Exchange-traded funds (ETFs) operate similarly to mutual funds. But whereas mutual fund orders can only be executed aftermarket hours, ETFs are executed throughout the trading day. 

At first glance, ETFs have a lot in common with mutual funds. Both offer shares in a pool of investments designed to pursue a specific investment goal. And both manage costs and may offer some degree of diversification depending on their investment objective. 

Determining whether an ETF or mutual fund is appropriate for your portfolio may require in-depth knowledge of how both investments operate. In fact, you may benefit from including both investment tools in your portfolio.  

Mutual funds

Exchange-traded funds

Bought and sold through many channels. 

Bought and sold through broker-dealers. 

Not listed on stock exchanges.  

Listed on stock exchanges. 

Priced at the end of the trading day. 

Price is continuously determined during the trading day. 

Capital gains within the funds distributed to shareholders. 

Capital gains within the ETF reinvested; may distribute a capital gain if the makeup of the underlying assets is adjusted.  

Dividends may be automatically reinvested. 

Dividends generally distributed to brokerage account. 

 

Do I diversify? 

A well-diversified portfolio allows you to manage some of the risk that’s inherent in investing. It’s similar to how you might travel with money. You don’t keep all of your cash in the same pocket. You keep some at the hotel, some in your wallet and so on.  

By investing your money in different asset categories — typically including stocks, bonds and cash equivalent — you can develop a portfolio that will help you reach your financial objectives while maintaining a level of risk that you're comfortable with.   

Ready to get started? 

We’re ready too! Our Investment Services team is here to help you understand the risks and navigate the market.   

13Investment advisory services offered through PFG Advisors, LLC, a SEC registered investment adviser. Securities offered through Osaic Wealth, Inc., member FINRA/SIPC. Insurance products offered through approved carriers. OCCU Investment Services, Oregon Community Credit Union, PFG Advisors, LLC, and Osaic Wealth, Inc. are separately owned entities and are not affiliated companies. Osaic Wealth, Inc. and its representatives do not provide tax or legal advice; therefore it is important to coordinate with your tax or legal advisor regarding your specific situation.  

CLICK HERE FOR A COPY OF PFG ADVISORS’ RELATIONSHIP SUMMARY (FORM CRS).

CLICK HERE FOR A COPY OF OSAIC WEALTH, INC’S RELATIONSHIP SUMMARY (FORM CRS).  

Free and simple tools are available for research firms and financial professionals at INVESTOR.GOV/CRS, which also provides educational materials about broker-dealers, investment advisors, and investing. 

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