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loss. It is up to you to choose those options that you feel comfortable with. If you have money to burn, perhaps you might want to dabble in high risk investments such as short-term options (the financial instrument kind). If your investment strategy calls for safety, you may want to choose savings bonds. Or of course you may decide to have a little of both for a diversified approach. The choice is yours. Let’s begin investing...

Financial Markets

The financial market is the universe where investors come together to buy and sell what are known as financial instruments. Financial instruments are basically certificates of ownership of specific investment such as stocks and bonds. Just about every country in the world has a financial market operating under its jurisdiction. That is why you hear US financial markets, European markets (you can omit the word financial, it’s assumed), or Asian markets. Each market has a few types of financial instruments that are traded. We will cover most of the instruments that are traded in the US markets.

A great many other markets also have the same types of instruments. These include Canada; European markets such as those in England, Germany, and France; Asian markets such as those in Japan, Hong Kong, and South Korea; and those in Russia, Australia, and New Zealand, among others. Therefore most of our discussion on the US markets applies to other markets around the globe as well, although there are always exceptions. Also, keep in mind that the instruments traded in the various markets must be registered (perhaps through their respective exchange and other regulatory bodies) as marketable.

The US financial markets consist of the following major financial segments: …