Part 7: Where do I Invest for the Best Deal for my Plan

Some of the largest Brokerage Firms in America

If you missed Part 6, please click the link below before moving on.

http://brokermakesyoubroker.blogspot.com/2015/04/part-6-dont-be-fool-protect-yourself.html

To Start, I better tell you what a stock and what is a bond?
 

A stock is an ownership share in a corporation. Each of these shares denotes a part ownership for a shareowner, stockholder, or shareholder, of that company. Stocks are traded on exchanges all over the world, the largest is the New York Stock Exchange or NYSE. Stocks are identified by their ticker symbol. For example, General Electric is identified as GE. Investors can buy a share in companies, or a share of a diversified global portfolio of stocks. Individual Investors, speculators, or gamblers can purchase shares for themselves, at a brokerage of their choice, or direct from the company, wherever they have an account set up.

There are different types of shares, common, preferred, and unlisted. Most shareholders purchase common stock. The goal is for capital appreciation, as well as income from interest, and dividends, so the investor can have a profit that beats monies in Treasury bills or beats inflation. Over time, stocks have outperformed cash and bonds; this takes into account depressions, world wars, and other world changing events. Stocks automatically adjust for the inflation of the currencies.

But bonds are not as speculative as stock. Many professional brokers, stock specialist, and traders may not agree with me. That is why my bond portfolio has out performed many of theirs over the past 6 years.

Bonds are evident of giving a loan to a company. It must mature at a given time and it must give a specified amount of money on a given dates. Here is why I borrow money from the banks and invest it in bonds. I pay the bond interest from the loan by using the interest from the bonds. At maturity, I pay off the loan principle from the bond maturity. I keep the difference called the "spread."

 

  Anything can go wrong with your stock purchase. A company backing the stock can have hard times and never recover. They can have labor problems, supply problems, and customer problems. What if you invested in a company that made buggy whips in 1890 then tried to get out of it in 1920 when people were buying cars not horses? What if you bought your stock at $20.00 then the stock fell to $5.00? Company "Y" comes along and buys the company out at $8.00. You have a loss.

With bonds, you worry about the company staying in business or going out of business. The only thing that can mess you up is if the company goes out of business.

Here is why we are going to use bonds in our business investment strategy. The rest of this series, we will start to combine the processes of borrowing money and buying Corporate Bonds. But to be successful at this, you must learn what we are doing here. 


*********************************************************************

-
 

My Book; Building Wealth with Corporate Bonds

 

I told you many times about my last book published in 2003 called, "Building Wealth with Corporate Bonds." The price is $35.00. I am selling off my final copies of this book. After that, I do not plan to produce anymore.  Some of the topics enclosed are: 

• Creating a Risk Policy
• Bull and Bear Markets
• What are Stocks and Bonds
• Corporate Bond Strategy
• Buying Corporate Bonds on Margin
• How to Place orders

You can buy a copy of my book by sending a donation of $35.00 money order to: Darnell L Williams

Building Wealth with Corporate Bonds

I/O Darnell L Williams

200 A Seneca Way

Havre de Grace, MD.  21078

I only have a limited amount of copies so order yours today. When they are gone, they are gone.