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Is there a lot to know about what junk bonds are? Isn't the name pretty self-explanatory? Well, that's not really how it works. “Junk”, when used in the context of finance, merely means “high-risk”. You could say that when you owe the credit card company the outstanding on your card, that to the company, it's a junk loan. It doesn't mean that they are sure that you won't pay. It just means that if you don't pay, there's pretty much nothing they can do about it, because there's no collateral involved.

Junk bonds often, may be a great deal. Just the way a credit card company has a great deal with the loan they hold over a person of high personal integrity such as yourself. The loan may technically be high risk. And so they'll charge high interest. But there really is no risk because they're dealing with a high integrity individual. There are plenty of junk bonds like this out there – where new companies with no long-term reputation but with reserves of skill, integrity and talent, will put bonds on the market.

Should you invest in junk bonds? Well, it entirely depends on what your research tells you about the company in question. You do get a higher rate of interest; if the company manages its affairs well, it's credit rating will improve and so will the absolute value of your bond; should the company go bankrupt, you'll get paid before the shareholders do; and the income through interest payments is likely to be pretty dependable.

When you're dealing with investing in anything, you can't help but get the feeling all the time that you're having the wool pulled over your eyes. All those strange percentages, all that strange jargon, the fact that the stock market has collapsed over and over again – how do you know that you can trust the mutual fund companies?

Often, your gut instinct that there is something going on that you don't like is completely justified. There are many ways in which the mutual fund companies do in fact lean towards untruthfulness. Here are a few things to keep in mind when you invest in the products offered by mutual fund companies.

The first myth goes to the very essence of why we choose to invest in mutual funds – safety. The mutual fund companies never fail to tell us that they are safer than the stock market, because they are managed by experts. The truth is, they don't perform better. But they don't do worse either. Usually, they do exactly the same as the regular stock market.