Growth Mutual Funds
These kinds of investments invest in growth stocks where the stocks of a given company are anticipated to grow at a faster rate as compared to the overall market growth. For many investors, growth mutual funds are suitable tools for achieving their investment goals. Investors who are willing to take risks may invest in such funds, but this type of investment is not suitable for people approaching retirement age, as it is a long-term investment.
California Municipal Bond
Investments in municipal bonds is an effective method of preserving capital at the same time, generating interest. Municipal bonds are usually exempted from federal taxes, and others are even tax-free depending on the issuing state laws. It seems advisable for the residents of California to acquire the municipal bonds as compared to outside residents. This is due to differences in state laws, and therefore, outside residents seem inappropriate clients for such bonds.
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Dividend-Paying Stock
This investment option is an effective source of passive income. However, the dividends yielded are generally low; for instance, 2-3%, therefore, it requires a lot of capital to generate significant income. Dividend-paying stocks yield better returns if given a longer time. It is, therefore, appropriate for young investors who have disposable income and are not close to their retirement age. On the other hand, it is not suitable for individuals nearing their retirement age and their finances may be held up in such an investment for a more extended period.
Annuities
If bought for the right reasons, annuities are suitable investments. They are excellent products for retirement planning. The most appropriate clients for annuities individuals who have extra funds saved for retirement, but it is not suitable for individuals who are successfully managing their finances. In addition, it is not advisable if the client's retirement plans are bound to change.
