Understanding your options
Investment Products
We believe investments should work together to help you accomplish your financial goals. A well-constructed portfolio is built around your objectives, time horizon, and comfort with risk, with each investment serving a specific purpose within your overall strategy. We’re dedicated to providing you with a wide range of investment products and services designed to help support those objectives.
Stocks – An investment that represents partial ownership in a company. While prices may fluctuate in the short term, stocks have historically provided opportunities for long-term growth.1,7
Bonds – A bond is a loan made to a government, municipality, or corporation in exchange for regular interest payments and the return of principal at maturity. Bonds can help provide income and stability within a portfolio.6
Mutual Funds – A professionally managed investment that pools money from many investors to purchase a mix of securities, such as stocks or bonds.1
Exchange-Traded Funds (ETFs) – A basket of investments that trades throughout the day on a stock exchange, similar to an individual stock. Like mutual funds, ETFs allow investors to purchase shares of an overall fund rather than individual securities.1
Direct Indexing - An investment strategy that seeks to replicate the performance of a selected, passive index by directly owning the securities within that index. This approach can offer greater customization and may provide opportunities for tax optimization.2
Alternative Investments – Investments that fall outside of traditional asset classes. These investments may provide additional diversification and exposure to different sources of risk and return.1,5
Brokered Certificates of Deposit (CDs) – Brokered CDs are issued by banks and purchased through a brokerage firm. Like traditional CDs, they typically offer a fixed rate of interest for a specified period of time, but their market value may fluctuate if sold prior to maturity.3
Annuities – A contract between an investor and an insurance company that can provide income payments either immediately or at a future date. Annuities are often used as part of a long-term retirement income strategy.4
Stocks – An investment that represents partial ownership in a company. While prices may fluctuate in the short term, stocks have historically provided opportunities for long-term growth.1,7
Bonds – A bond is a loan made to a government, municipality, or corporation in exchange for regular interest payments and the return of principal at maturity. Bonds can help provide income and stability within a portfolio.6
Mutual Funds – A professionally managed investment that pools money from many investors to purchase a mix of securities, such as stocks or bonds.1
Exchange-Traded Funds (ETFs) – A basket of investments that trades throughout the day on a stock exchange, similar to an individual stock. Like mutual funds, ETFs allow investors to purchase shares of an overall fund rather than individual securities.1
Direct Indexing - An investment strategy that seeks to replicate the performance of a selected, passive index by directly owning the securities within that index. This approach can offer greater customization and may provide opportunities for tax optimization.2
Alternative Investments – Investments that fall outside of traditional asset classes. These investments may provide additional diversification and exposure to different sources of risk and return.1,5
Brokered Certificates of Deposit (CDs) – Brokered CDs are issued by banks and purchased through a brokerage firm. Like traditional CDs, they typically offer a fixed rate of interest for a specified period of time, but their market value may fluctuate if sold prior to maturity.3
Annuities – A contract between an investor and an insurance company that can provide income payments either immediately or at a future date. Annuities are often used as part of a long-term retirement income strategy.4
1 Investment returns may fluctuate and are subject to market volatility, so that an investor’s shares, when redeemed, or sold, may be worth more or less than their original cost.
2 Wells Fargo Advisors and its affiliates do not provide legal or tax advice. Please consult your tax and legal advisors to determine how this information may apply to your own situation.
3 Generally, CDs may not be withdrawn prior to maturity. CDs are FDIC insured up to $250,000 per depositor per insured depository institution for each account ownership category. CDs may be issued by out of state institutions.
4 Variable annuities are long-term investments appropriate for retirement funding and are subject to market fluctuations and investment risk. Guarantees are based on the claims-paying ability of the issuing insurance company. Guarantees apply to minimum income from an annuity; they do not guarantee an investment return or the safety of the underlying funds.
5 Alternative investments, such as hedge funds, funds of hedge funds, managed futures, private capital, real assets and real estate funds, are not appropriate for all investors. They are speculative, highly illiquid, and are designed for long-term investment, and not as trading vehicle. These funds carry specific investor qualifications which can include high income and net-worth requirements as well as relatively high investment minimums. The high expenses associated with alternative investments must be offset by trading profits and other income which may not be realized. Unlike mutual funds, alternative investments are not subject to some of the regulations designed to protect investors and are not required to provide the same level of disclosure as would be received from a mutual fund. They trade in diverse complex strategies that are affected in different ways and at different times by changing market conditions. Strategies may, at times, be out of market favor for considerable periods with adverse consequences for the fund and the investor. An investment in these funds involve the risks inherent in an investment in securities and can include losses associated with speculative investment practices, including hedging and leveraging through derivatives, such as futures, options, swaps, short selling, investments in non-U.S. securities, “junk” bonds and illiquid investments. The use of leverage in a portfolio varies by strategy. Leverage can significantly increase return potential but create greater risk of loss. At times, a fund may be unable to sell certain of its illiquid investments without a substantial drop in price, if at all. Other risks can include those associated with potential lack of diversification, restrictions on transferring interests, no available secondary market, complex tax structures, delays in tax reporting, valuation of securities and pricing. An investment in a fund of funds carries additional risks including asset-based fees and expenses at the fund level and indirect fees, expenses and asset-based compensation of investment funds in which these funds invest. An investor should review the private placement memorandum, subscription agreement and other related offering materials for complete information regarding terms, including all applicable fees, as well as the specific risks associated with a fund before investing.
6 Investments in fixed-income securities are subject to market, interest rate, credit and other risks. Bond prices fluctuate inversely to changes in interest rates. Therefore, a general rise in interest rates can cause a bond’s price to fall. Credit risk is the risk that an issuer will default on payments of interest and/or principal. This risk is heightened in lower rated bonds. If sold prior to maturity, fixed income securities are subject to market risk. All fixed income investments may be worth less than their original cost upon redemption or maturity.
7 Stocks are subject to market risk which means their value may fluctuate in response to general economic and market conditions, the prospects of individual companies, and industry sectors. Investments in equity securities are generally more volatile than other types of securities.
