Investment Types

There are three basic asset classes, or investment types: stocks, bonds and cash. Cash investments include bank and credit union accounts, money market mutual funds, certificates of deposit, and U.S. Treasury bills. Stocks represent ownership in a company and bonds are loans that typically pay regular interest until the principal is returned at maturity.

You can invest in just one or two of these asset classes on their own, or in a portfolio that contains a combination of some or all of them. If you buy shares in a mutual fund, the fund's managers pool your assets with other investors' to make large investments in a range of securities.

Investing can be more than just purchasing securities outright. Options, for example, belong to a category of financial products known as derivatives. With options, you aren't purchasing the security, but rather a contract whose value is based on the performance of the underlying investment or other financial instrument.

Strategies like compounding, hedging and leverage can help maximize your return, limit risk and increase your financial power, respectively. Investment techniques can be short-term or long-term and range from the conservative to the aggressive. The approach you take and what you invest in depends upon your financial objectives, time horizon and risk tolerance.

Options involve risk and are not suitable for all investors. Detailed information on our policies and the risks associated with options can be found in Scottrade's Options Application and Agreement, Brokerage Account Agreement, and Characteristics and Risks of Standardized Options (available at your local Scottrade branch office or from the Options Clearing Corporation at 1-888-OPTIONS or by visiting All option accounts require prior approval by Scottrade. Market volatility, volume, and system availability may impact account access and trade execution. Supporting documentation for any claims will be supplied upon request.

Investors should consider the investment objectives, risks, charges, and expenses of mutual fund carefully before investing.A prospectus contains this and other information about the fund and is available through or through a Scottrade branch office. The prospectus should be read carefully before investing<