Investment Opportunities in the U.S.

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Major U.S. Investment Services

If you are searching for information on investment options or where to invest money, there are several investment services available in the U.S. from which you may choose. You can choose on or more of these services to meet either your short term or long term financial goal. Below is a brief description of some of the major ones.

Commercial Banks

These are State and National Banks which provides checking and savings accounts, sell certificates of deposit, and make loans. The Federal Deposit Insurance Corporation (FIDC) insures checking and savings accounts up to $250,000, as of January 2012.

Examples of Commercial Banks

  • Bank of America
  • Wells Fargo
  • Chase
  • Citigroup

Thrifts

Savings and loan associations(S&Ls), mutual saving banks and credit unions which offer checking and savings accounts and make mortgage and consumer loans. Historically, S&Ls make mortgage loans for houses while mutual savings banks and credit unions made small personal loans, such as automobile loans. Most major thrifts offer the same range of banking services as commercial banks. The Federal Deposit Insurance Corporation insures checking and savings deposit up to $250,000, as of January 2012.

Examples of Thrifts

  • First Federal
  • GE Capital Retail Bank
  • Third Federal Retail Bank
  • Third Federal S&LA of Cleveland
  • ING BANK

Insurance Companies

Firms which offer policies(contracts) through which individuals pay premiums to insure against some kind of loss, say, disability or death. In some life insurance policies and annuities, the funds are invested for the client in stocks and bonds and paid after a specified number of years. Thus, insurance sometimes has a saving or financial-investment element.

Examples of Insurance companies

  • Prudential Financial
  • New York Life
  • MetLife
  • Liberty Mutual

Mutual Fund Companies

These are firms which pool deposits by customers to purchase stocks or bonds(or both). Customers thus own a share of a particular set of stocks or bonds, say, stocks in companies expected to experience a rapid growth(a growth fund) or bonds issued by state governments(a municipal bond fund).

Examples of Mutual Fund companies

  • Fidelity
  • Dreyfus
  • Putman
  • Vanguard

Pension Funds

For-Profit or nonprofit institutions which collect savings from workers(or from employers on their behalf) throughout their working years and then buy stocks and bonds with the proceeds and make monthly retirement payments.

Examples of Pension Funds

  • Teachers Insurance and Annuity Association-College Retirement Equity Fund
  • Teamsters' Union

Securities-Related Firms

Firms which offer security advice and buy and sell stocks and bonds for clients. More generally known as stock brokerage firms. They are available online as well as offline.

Examples of Securities-Related Firms

  • Merill-Lynch
  • Charles Shcwab
  • Scottrade

of all the above mentioned investment vehicles, thrifts seem to be affected most by the financial crisis. Prior to the Financial crisis, the largest thrifts included Washington Mutual and Golden West. Today, both of these banks are no longer in existence. In fact, since the financial crisis when the mortgage industry was dealt a huge blow, thrift banks have been gradually disappearing.

Because they focus primarily on mortgage and consumer loans, this makes them particularly more vulnerable to housing market downturns. However, it's believed that the last announcement made by the Federal Reserve about how much money a bank must have on hand, thrifts have essentially been wiped out. Based on finding, ING is believed to be the largest thrift currently in operation.

Conclusion

With all the information provided above on major financial services available in the U.S., hopefully, the question should no longer be -- where to invest money? but rather, which one of these investment vehicles should I use to meet my financial goals?

By: I.McFarlane 8/7/12

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