Welcome to Securities 101—where we break down investing basics to help you feel confident taking your first steps. Whether you’re planning for retirement, education, or building long-term wealth, this guide is for you.

1. Why Consider Investing?

Investing isn’t just for Wall Street—it’s for anyone with a dream and a goal:

• Grow your money
  Investments like stocks, bonds, and mutual funds can potentially earn more than traditional savings accounts.
  (Just remember that higher returns come with some risk.)
• Plan for retirement
  Through tools like 401(k)s or IRAs, you can build a nest egg for your future and let your savings work for you.
• Reach life goals
  Whether it’s buying a home, starting a business, or saving for college, investing helps you earn more over time.
• Maximize tax benefits
  Contributions to retirement accounts often reduce your taxable income today.
• Benefit from employer matches
  If your employer offers matching contributions in a 401(k), that’s free money you don’t want to leave behind!
• Support innovation
  Putting money into new ventures can help grow the economy and create jobs—plus, it’s exciting to be a part of something new.
• Build passive income & fight inflation
  Compounding returns and smart investing help your money work harder while protecting its purchasing power.

2. What is Securities Trading?

Securities trading means buying and selling financial assets—think stocks and bonds—to make a profit. Traders buy low, sell high, and often work independently or through firms like investment banks.

3. Understanding “Securities” and Their Types

A “security” is a tradable financial asset. Here are the main types you’ll hear about:

4. Saving vs. Investing: What’s the Difference?

• Saving is about preserving and accessing your money quickly—with low risk and minimal returns.
• Investing involves higher risk for the chance of greater, long-term growth—but your money isn’t guaranteed and could lose value.

5. What is Risk Tolerance?

Risk tolerance is how much loss you’re willing to weather in pursuit of potential gains.
It’s personal — depending on your age, goals, income, and feelings about market volatility.

6. The Risks of Investing

All investing comes with risk, including:

• Market ups and downs (fluctuation)
• Sudden volatility (unpredictable changes in value)
• Economic or political turmoil (regulatory changes can impact investments)
• Regulatory shifts (changes in laws and regulations)
• Rising interest rates
• Difficulty converting assets to cash
• Credit or company defaults (counterparty risks)
• Operational or management issues

In short: Your investments could lose value—sometimes unexpectedly. That’s why diversification matters.

7. What is a Stock Index?

A stock index, like the S&P 500 or Dow Jones, tracks a range of stocks to measure overall market performance. Think of it as a snapshot of how the market or a sector is doing.

8. How Stock Buying & Selling Works

• Buying: You purchase shares from someone else — those payments go to the seller, not the company.
• Selling: You sell your shares on the exchange — again, to another investor, not the company.
• Price: Determined by supply and demand, plus performance, news, and sentiment.

9. Stock Price Basics

Stock prices change as investors weigh future prospects. Key influences include:

• Company earnings
• Industry trends
• Economic health
• Market sentiment
• News and events

10. What is an ETF?

ETFs are funds you can buy and sell like stocks. They track sectors—like technology, bonds, or commodities—giving you instant diversification.

11. What are Dividends?

Dividends are payments companies make to shareholders from profits. Here’s what to know:

• Usually paid quarterly in cash
• Not guaranteed—it’s up to the company’s board
• Paid per share—own more shares, get more money
• Preferred stocks often get dividends first

12. What is Diversification?

Spreading your investments across asset types helps balance your risk and smooth out ups and downs.

13. Building a Diversified Portfolio

Here’s how to get started:

1. Mix asset classes (stocks, bonds, real estate, cash)
2. Diversify within each class (different sectors, credit ratings, durations)
3. Pick asset allocation based on goals and risk comfort
4. Rebalance regularly to stay on track
5. Include non-correlated assets like gold or real estate
6. Choose high-quality investments with solid fundamentals
7. Monitor and adjust over time as your life changes

By following these steps, you can shape a portfolio that’s robust, balanced, and built for growth.

Final Thoughts

Investing isn’t about gambling — it’s about planning. Starting with a clear strategy and understanding how securities work can help you build confidence and set up a path toward financial success.

Want to Dive Deeper?

Visit the CCCU website for additional securities and investment resources and to open your trading account. CCCU is here to help you create a plan that fits your life—and your dreams.

Disclaimer: Investing involves risk, including the potential loss of principal. This blog is for information only and not investment advice.