Talking the Talk - An Investment Primer

Annuities are insurance products purchased with after-tax dollars. The fund's monies and earned interest is tax-deferred. Upon retirement, the investor receives monthly payments for life. After death, depending on the settlement, or pay-out, option chosen, and if the fund is not yet fully paid out, the payments transfer to a designated benificiary. Fixed annuities put the investment risk on the insurance company, which pay the investor a certain interest rate, while variable annuities allow the purchaser to invest in a mutual fund(s) of his or her choice. Convertible bonds are corporate bonds that can be swapped for stock in the company. Conservative investors may gravitate to these bonds, which pay lower interest than many but offer the option of higher rewards if the company's stock price rises significantly. . A discretionary investment account is a customized portfolio that is designed and overseen by an investment manager. Not for the just-hatched doctor, this option generally requires an investment of between $500,000 and several million dollars. . Hedge funds are for the well-heeled investor who's willing to risk it all ($1 million gets you in the door) in order to win big. The funds are pooled money from a group of investors, no more than 99. Investment decisions are made by the fund's manager, who can expand the fund by borrowing ...

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