Introduction to stocks, bonds, and mutual funds. In a nutshell, stock types of investing allow you to purchase ownership in a company. Although it is an extremely small ownership (e.g. 10 shares of a company which has 100,000,000 million shares available), it is a way to invest in companies you are familiar with and you would not be able to start a similar company of your own. A mutual fund is a way to invest in multiple companies at once by pooling money from many people. This is a good way to diversify (spread out your money in different areas to avoid one area from dropping so much in price you may lose all you money) your portfolio (your overall financial investment overview). Bonds are a safer investment, but with safer investments comes reduced returns (profit). Sometimes bonds make sense because the investment arena is unstable (doing weird ups and downs of profit) and being invested with bonds won’t be effected. Bonds are like loans you give to governments or companies, and they pay you back with interest over time. If 1,000,000 people invest in the bond market, their money may be combined and then supporting these projects governments (city, county, state, etc) need to fund to make advances in their communities. This is an extremely over-simplification of what the bond market is, but you get the point.