5 financial terms not to take for granted
Safety can be a comforting word. We all strive for safe neighborhoods, schools and, in many cases, investments that shelter our hard-earned savings. Hebeler shatters the notion. "Nothing is safe!" he says. An investor may prefer to avoid that reality, but with any investment comes risk -- the archenemy of safety.
Drummond Osborn, a Certified Financial Planner professional and owner of Osborn Wealth Management, says safety is a relative concept: "Safe as compared to what? Is it as safe as an FDIC-insured CD, a U.S. Treasury bond -- or is it just safer than a stock?"
Palushaj puts the traditional measure that bonds are safer than stocks to the test. "On paper," she says, "bonds can appear safer than stocks because bond owners get paid first if a company goes bankrupt. But if you receive just pennies on the dollar, are they really safer?"