However, I realized that I hadn't a clue what the difference is between a stock, a bond, a mutual fund, an option, or an IPO. So, in the interest of becoming a savvy stock Mom investor, I decided that it would be of benefit to know where each of these falls within the larger picture of the Stock Market.

The Stocks
Let's start with stocks. Trusty Wall Street Dictionary to the rescue defining a stock as "a unit of company ownership".

Finally, a definition that is short and easy to understand. And…at first glance…understandable. I purchase a stock for $XX.XX amount of dollars and I then become owner in that portion of the company that I purchased.

Easy enough. I am now a stockholder.

And if you're feeling brave, take a peek at the definition of a stock given at [Investor Words]. I think what's important here, which is enough for me, is that stocks are also referred to as "equities, equity securities, or corporate stock".

Further quality information here, by none other than The Motley Fools

Also an easy to understand Web site on Stocks, definitions and types of stocks

The Bond
I knew it was too good to be true. The definition of a bond is a bit trickier and longer. For a full explanation, check Investor Words. My briefer description would be more in line with the one given by The Motley Fool's You Have More Than You Think book. I really, really like these guys. They definitely speak in a language that I can understand.

They indicate "a bond essentially represents a loan. Bondholders lend money to governments or companies and are promised a certain rate of interest in return. U.S. government bonds, for example, carry little risk and thus can offer lower interest rates. Companies offer higher interest rates. The riskiest companies' bonds are called 'junk bonds'".

Well…I can't let this one go. I've got to find out why they're called "junk bonds". With a name like that, there's got to be something bad there.

Okay…never mind. I started following that thread and ended up in BB and AAA and BBB and yields and risky and safe. We won't go there right now Moms but soon, very soon.

I'll suffice it to say junk bonds are risky but may pay a profit, if the company or corporation offering the junk bonds make it that far.

So far, I've learned that companies and corporations can sell stocks and bonds to potential investors. Why would I pick a stock over a bond or vice versa?

I believe the amount of potential money that could be earned from a stock would be higher since bonds are purchased at a set rate of interest only. You know exactly how much your investment dollar will bring you at the time of maturity of the bond.

The amount of money to be made (or lost) on a stock, however, is not etched in stone and it's value can be effected by the overall market, the earnings and losses of the company or corporation, and the oftentimes unpredictable, fickle mood that is The Stock Market.

Fool.com-Investing Basics-Bonds has a very comprehensive web page detailing all types of bonds.

The Mutual Fund
Check Investor Words for a thorough description of a mutual fund or you're welcome to my own perception of this possible investment plan.

Everybody can get in on investing through this option. A group of like-minded people with similar plans for their investment dollars, hand over their money to an investment company. For a fee, a group of managers, in turn, invest that money.

These managers would appear to be experts in the field and have knowledge of The Stock Market that goes beyond what a small investor could know. In addition, your small investment in a mutual fund (bolsters the total pot that could allow for greater profits (or losses) to you.)

It's true that when an individual makes an investment in a Mutual fund, the total "fund" itself increases (your money, less the cost of putting your money in, goes into the fund.) The profits or losses to you, the individual, are determined by the changes in the values of the securities that the mutual fund invests into, and how well the mutual fund is managed. The size of the 'total pot' (a.k.a. the 'mutual fund' itself) doesn't really have an influence on the level of risk associated with mutual fund.

For the novice investor, who cannot and does not want to follow their investments at close range, mutual funds can do this for them. I like this idea, but it appears to take the "fun" out of investing. I've given up some of my decision-making powers to a group of individuals, which may or may not be good.

I have found both of these Web sites to be extremely beneficial in clarifying many questions that I had about Mutual Funds. I've book-marked both as I begin to consider, "Where in the world am I going to put my money?"

Investing for Women at About.com

Mutual Funds Investor Center

And as I began delving into what an "option" is, I realized that attempting to explain "options" i.e., what they are, what they do, and the different types, would take a separate article in itself.

And if you've followed my other articles at all, you will find that this is one of my famous stall tactics. I do that when I start learning about something and panic.

Not one to give up easily…I'll tackle it and report to you next week. I'll also begin traveling into the IPO's, or Initial Public Offerings.

In the meantime, I am desperately trying to avoid the urge to stash my money between the mattress and box springs in my bedroom.

Thank you for joining me

Joyce