| Asset | How it works |
|---|---|
| Stocks | Stocks offer you part ownership in a business, and they’re one of the best wealth-building strategies. Stocks can be very volatile, so it’s best to hold them in your portfolio for at least three to five years. Here’s a primer on how to invest in stocks. |
| Bonds | Bonds are considered a less risky investment than stocks, but they come with lower gains. Bonds tend to be much less volatile than stocks, making them ideal for balancing out a portfolio and generating an income stream. Here’s how bonds work and how to use them to build wealth. |
| Mutual funds | A mutual fund is a collection of investments owned by many different investors. You buy shares in the fund, which is diversified among various stocks and/or bonds, reducing your risk and potentially even increasing your returns. While mutual funds offer diversification, they often carry higher fees than ETFs or index funds. |
| ETFs | Exchange-traded funds are similar to mutual funds in that they spread your investment dollars across multiple stocks, bonds or other assets. However, ETFs offer a few advantages over mutual funds, namely very low management fees. |
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