Investment Analysis

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You can take your investment strategizing another level deeper with the Investment Analysis tool. This visualization takes your stocks and bonds and breaks them down into nine different categories based on factors like quality and growth potential. These categories are displayed as an easy-to-read grid so you can get a quick and accurate read on what kinds of investments you have.

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In order to use the analysis tool properly, it’s important to understand the basic differences between stocks and bonds.

  • Stocks are pieces of a company. When you buy a stock, you literally own a tiny piece of the company that issued the stock. When that company is doing well, the value of your piece of the company generally increases, and you can sell it for more money than you paid, thus bringing in a return. If the company is doing poorly, your piece of the company will generally be worth less, and you may lose money by selling.

    Stocks range in terms of their risk, but they are, in general, considered to be more risky than bonds. However, you shouldn’t forget that in the long run, a diversified portfolio of stocks is very likely to increase in value, which is why they are among the most important investments.

  • Bonds are not like stocks: bonds are like an I.O.U. When you buy a bond, you are essentially loaning someone your money (often a government, but also companies) with the promise that they will pay it all back, plus interest. You could get that interest in a yearly or even quarterly payment, or in one lump sum when the bond matures. When a bond matures, you get all your money back; some bonds may also pay interest at maturity, rather than yearly.

    Bonds are generally considered to be safer than stocks because of their long-term nature, but they may not bring in the same high returns. Bonds are generally predictable and steady. Because they return a specified interest, they are often referred to as “fixed-income” investments. Though there is always a small chance that a bankruptcy or default will happen, this is unlikely, especially with high-quality, long-duration bonds.

To learn more about the Stocks analysis tool, click here.

To learn more about the Bonds analysis tool, click here.

Disclaimer: The functionality of this software varies depending on which financial institution you use. Not all content in this guide will apply to your MoneyMap experience.

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