Investing is confusing.

But it doesn’t have to be.

Here on the Fixed Income Fund blog, we’ve done our best to help clear things up for you in order to help you understand the ins and outs of fixed annuities, saving for retirement, and even money saving tips for millennials. However, we still hear from clients who say they are hesitant to dive into the investment waters because of the confusing contracts, conditions, and a glossary of terms that makes understanding investments seem more like studying a foreign language.

Well, this time we’re here to help make it even simpler.

In this post, we’re going to cover a handful of the most essential terms you need to know when it comes to investing. Think of it as a study guide of sorts, or even your very own investment term dictionary.

We’re going to dissect diversification, investigate indexed annuities, break down bonds, and a whole lot more. Let’s get started so that you can enter the waters of investment with confidence and generate wealth like a true pro!


When it comes to making an investment, the first thing you need to understand is that you’ll be dealing in “assets.” What makes an asset, though? Well simply put, an asset is something with value, whether it be arbitrary or monetary, which has the potential to make you money. In the world of investments, your assets are what you own; types of assets can include money, stocks, bonds, commodities, real estate holdings, and other investments.

Asset Allocation

Now that we understand assets, let’s move on to asset allocation. If you’re dealing with a financial planner or investment broker, you may have heard them refer to your asset allocation plan. Don’t get overwhelmed, this is simply referring to your personal investment strategy, or how you wish to divvy up your assets. Typically, your assets are allocated into different classes, such as cash, stocks, or bonds.

Cash, Stocks, And Bonds

Since these are the three common classes of assets, let’s go ahead and define each one while we’re at it.

  • Cash: This is the most common commodity of all, and if you don’t know what cash is then you might need a crash course in economics while you’re at it. Cash is money, and it’s what investing is all about. Cash is an important asset to have.
  • Stocks: A stock is essentially a small piece of ownership in a company. The value of your share is based upon the performance of that particular company. This is a common investment strategy.
  • Bonds: Bonds on the other hand serve as more of a loan to a certain company, typically an insurance company or similar industry. Bonds typically earn you money by accruing interest over the course of their lifespan.


Another common investment strategy is to invest in annuities. While there are different types of annuities in which you can invest, the general definition of an annuity is a form of insurance or investment in which you pay a lump sum to a company (again, often insurance), which then pays out monthly dividends (payments) for a predetermined amount of time. Annuities can last for five years, 10 years, or they can even be lifetime annuities. It all depends on the type you wish to purchase. The different types of annuities include fixed annuities (hold the same interest rate throughout maturity) and indexed annuities (fluctuating rates based on the stock market index).

Investment Broker

Typically, when you’re interested in entering the world of investment, you’ll be directed to a brokerage firm, where you’ll get situated with an investment broker.

This is the personal who will buy and sell investments on your behalf. However, one thing to know about investment brokers is that they often charge exorbitant management or brokerage fees in return for handling your investments. Those fees can sometimes eat into your returns, so be sure you fully understand what you’re getting into before you get started.


A dividend is how you get paid from your investments, whether it be an annuity, stock, or other type of financial security. Dividends can be paid out to investors after a particularly good quarter or year, or they can be paid out on a regular basis such as monthly, quarterly, or annually.


Your portfolio is the collection of investments you have, similar to your asset allocation strategy. It’s typically best practice to have a “diversified” portfolio, which means holding several different investments with varied amounts of risk and valuations in order to protect against loss. It’s wise to diversify your portfolio by investment type (stocks, bonds, annuities, mutual funds, etc.), as well as by industry, location, and several other factors.


Your investment’s maturity, simply put, is the time in which it becomes fully grown and therefore pays out. After making a principal investment in something like a 10-year fixed annuity, for example, your investment will reach maturity after 10 years and at that point will stop paying out dividends.

Fixed Income Fund

We saved the best term for last. When it comes to investing, you need to make sure you are making the right decisions for you and your future. The Fixed Income Fund is your answer to a simple investment with no fees, high interest rates, and simple terms. Simply put, the Fixed Income Fund is a type of investment which purchases mortgage and trust deed loans, which then pay out interest on a monthly basis. By pooling funds from our investors, the Fixed Income Fund is able to diversify its holdings by property type, location, and more, protecting against risk and loss.

The Fixed Income Fund features higher rates than fixed annuities, stocks, and bonds, and the flexible terms allow you to choose the investment maturity that is right for you.

What better way to start investing than by participating in a fund that provides stable, consistent income on a monthly basis?

Learn more investment tips and ask about the Fixed Income Fund today. Contact Tactical Wealth if you’re ready for a simple investment and peace of mind.