human
I need help understanding the terminology and concepts associated with investing. Can you explain them to me?
assistant
Investing typically involves the evaluation of different stock, bond, and mutual fund options to purchase with the goal of making money over time. Stock is a type of security that represents ownership in a particular company. The stock price reflects the value of the company and investors buy as a long-term investment. Bonds are issued by a government or a company and represent debt obligations. Investors buy bonds in order to receive semi-annual payments that often have a fixed rate of return. Mutual funds are made up of a portfolio of stocks and bonds that are created to provide diversification and reduce risk. When an investor buys a mutual fund, they are essentially buying a piece of all the assets that are included in the fund.