When you first start thinking about investing - whether it's because you're eligible to contribute to a retirement plan at work or decide to open an investment account on your own - you may feel overwhelmed by all the decisions you have to make. For instance, you're probably asking yourself whether stock or bonds are a better choice for you, or if you should choose mutual funds that invest in either of these assets. And beyond figuring out which types of investments are most appropriate, how do you choose among the thousands of individual securities and funds available?

But at the core of most of the critical choices you make as an investor are a few basic principles, or ABCs. Mastering these ABCs - such as risk and return, compounding, and how inflation affects your portfolio - and understanding how they apply to your own financial goals and circumstances can help guide you through many of your most important investing choices.

Investing vs. Saving

Saving and investing aren't the same - although they both play a role in your financial plan. While they both involve setting aside some of your income for the future, saving often refers to putting money in the bank - in savings and

When someone in business talks about their ROI, they mean their Return On Investment. A savvy business person will want to know all about the ROI of a project, because it tells him or her how successful it is. ROI is usually a matter of simple mathematics, although it can involve a number of different factors.

Any expense that a company has can be calculated in terms of ROI. Some expenses may not have any direct ROI, or their ROI might be zero. Buying a new stapler, replacing a broken printer, or repainting a room doesn't produce any revenue, so these expenses don't have any ROI. For this reason, ROI is not customarily used to discuss these types of expenses, even thought they could be considered investments in the company.

A more common use for ROI might be something like an ad campaign. Buying ad space in a newspaper, hiring a graphic designer to create the ad, and paying a photographer to take pictures of your product all cost money. This is your investment in the ad campaign. In order to determine your ROI, you need to figure out how much money your company

WASHINGTON (AP) -- Ford Motor Co. said Friday it is recalling 3.6 million passenger cars, trucks, sport utility vehicles and vans to address concerns about a cruise control switch that has led to previous recalls based on reports of fires.

Ford said the recall covered more than a dozen vehicle models built from 1992-2004. The company said it was responding to concerns from owners about the safety of their cars and questions about the speed control deactivation switch in the vehicles that is powered at all times.

The Dearborn, Mich.-based automaker previously had recalled nearly 6 million vehicles beginning in January 2005 because of engine fires linked to the cruise control systems in trucks, SUVs and vans.

"Customers remain concerned about the long-term durability of the speed control system and about the safety of their vehicles," said Ford spokesman Dan Jarvis.

He said the automaker had received "a few reports of fires" in Ford Crown Victoria passenger cars prior to the recall. He

Daily FX
British Pound Sees Third Day of Solid Gains
Thursday August 2, 5:18 pm ET
By Kathy Lien, Chief Strategist strategist@dailyfx.com

Stronger than expected construction sector PMI follows the upside surprise that we saw in manufacturing PMI earlier this week. Overall the UK economy is strong, which is why we also expect service sector PMI to be firm tomorrow as well. The Bank of England kept interest rates unchanged today, which was right in line with expectations.

Next week, the central bank will be publishing their Quarterly Inflation Report and like the ECB we expect them to remain concerned about inflationary pressures. Having just raised interest rates last month, we did not expect a back to back rate hike, but at the same time, we do expect rates to be taken to 6 percent by the end of the year as long as conditions remain the same, that is oil prices hold near its current levels and the global economy does not see a major recession.

VIENNA, Austria (AP) -- Oil prices slipped Friday on mixed interpretations of U.S. fuel stocks data. Still, perceptions that the market was undersupplied pointed to continued near-term upward pressure.

Light, sweet crude for September delivery fell 29 cents to $76.57 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe. The contract added 33 cents to settle at $76.86 a barrel Thursday.

September Brent crude dropped 15 cents to $75.61 a barrel on the ICE Futures exchange in London.

Analysts say energy investors are split over the meaning of Wednesday's weekly inventory report from the U.S. Energy Department's Energy Information Administration. The report showed crude oil stocks declined 6.5 million barrels last week, far more than the 690,000-barrel decline analysts surveyed by Dow Jones Newswires had expected.

The report also showed a steep jump in refinery activity and an increase in gasoline inventories. The build in gasoline stockpiles was particularly significant in that it

TOKYO (AP) -- Toyota, on track to overtake General Motors as the world's biggest automaker this year, said Friday its April-June profit jumped 32.3 percent to a record high for a quarter, lifted by strong overseas sales and a weaker yen.

Surging gas prices have proved a big plus for the Japanese automaker, as drivers flock to Toyota's fuel-efficient models, including the Camry, the best-selling model in the U.S., and the Prius gas-electric hybrid.

"The results are fantastic," said Tsuyoshi Mochimaru, auto analyst with Lehman Brothers in Japan.

Foreign sales are going strong, and the weak yen, which raises the value of overseas earnings when converted into yen, is making rosy earnings even rosier as Toyota's exports grow, Mochimaru said.

Group net profit at Toyota, which also makes the Lexus luxury model and compact Corolla, totaled 491.54 billion yen ($4.1 billion) for the quarter through June, up