Investment Strategy: Financial Market Basics

When it comes to investing, the common terminology says that you’re investing in “the markets” or Wall Street. But what do these terms mean, and how are markets defined?

Simply put, financial markets are where traders and investors buy and sell assets. Markets can be used as a way for businesses to reduce risk and raise capital. Through markets, investors can buy into these companies in a way that hopefully makes money. The benefits of financial markets in a capitalist economy are numerous, from bringing confidence to the economy and helping to fund entrepreneurial ventures to providing liquidity to businesses. 1,2

Several types of financial markets can be invested in, including but not limited to stocks, bonds, derivatives, and commodities. We review and explain the basics of these four types of financial markets below.

The Stock Market

The stock market is a financial market where companies can go to raise capital to expand. Investors can buy the shares of a company—called stocks—through a broker-dealer. Stocks may be traded on listed exchanges, such as the New York Stock Exchange (NYSE) or the National Association of Securities Dealers Automated Quotations (Nasdaq) stock market. Indexes such as the Standard and Poor’s 500 Index and the Dow Jones tracks the averages of a group of companies that are publicly traded.  1,2

Mutual funds allow you to buy a bunch of stocks at once without having to pick them out individually. You may have seen mutual funds as an option for investing in your 401(k), for example.  1,2

The Bond Market

Bonds are used when companies need to raise a large amount of money. Unlike stocks, bonds are a security in which an investor loans money for a defined period at a preestablished interest rate. Furthermore, unlike stocks, in which there is no guarantee of financial gain, bonds are more like a loan agreement. The bond market sells securities, such as notes and bills issued by the United States Treasury.  1,2

Derivatives

Derivatives entail a more complicated financial market. Essentially, a derivative is a contract between two or more parties whose value is based on an agreed-upon underlying financial asset (e.g., a security) or set of assets (e.g., an index). Derivatives are secondary securities whose value is solely derived from the value of the primary security that they are linked to. In and of itself, a derivative is worthless. Rather than trading stocks directly, a derivatives market trades in futures and options contracts, as well as other advanced financial products, which only have as much value as the primary security.  1,2

The Commodities Market

Commodities markets involve physical goods that are bought, sold, and traded. Whereas stocks and bonds are more akin to financial contracts, commodities markets deal in physical goods. There are four main types of commodities markets: energy, metals, agricultural products, and livestock.  1,2

When it comes to investing, there are many options to choose from, which can seem intimidating. While working closely with a financial advisor can help you decide which investments are right for you, it’s also important to understand the basic concepts of your investments. Don’t be afraid to ask your financial advisor about your investments. An intelligent investor is worth their weight in gold.


  1. https://www.thebalance.com/an-introduction-to-the-financial-markets-3306233
  2. https://www.investopedia.com/terms/f/financial-market.asp

This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.

Social Security and Your Spouse

Many people know that they’re eligible for Social Security benefits, but did you know that there’s also a provision to provide for spouses, regardless of whether they’ve contributed to the program? You might also be eligible to claim spousal benefits if you’re widowed and, in some cases, even if you’re divorced.

You may be surprised to learn that if you apply for Social Security when you are married, you automatically apply for spousal benefits. This was added to recognize the many spouses who were stay-at-home parents and either never entered the workforce or didn’t enter the workforce for long enough to qualify for benefits of their own. ¹ ²

How does claiming spousal benefits work? For spouses to receive benefits, they must:

  1. Be at least 62-years-old or older or…
  2. Caring for a child 16-years-old or younger, or for a child receiving Social Security disability benefits. If you’re in this situation, Social Security benefits are not reduced.
  3. Your husband or wife must have also claimed Social Security benefits.
  4. You and your spouse must have been married for at least one year. ¹ ²

Spousal benefits are capped at 50% of the benefits your spouse would have received at their full retirement age. Moreover, if your spouse claims their benefits before retirement age, your benefits will also be reduced.1,2

It’s important to note that if your spouse dies, you should apply for survivor benefits and not spousal benefits. For people who are widowed, if your spouse’s benefits are higher than yours, you might be eligible to receive their full benefit amount instead of spousal benefits. However, if you remarry, you won’t be eligible to receive your late spouse’s Social Security benefits. 3,4

There are also certain conditions where you can receive spousal benefits even if you’re divorced. The following conditions must be met:

  • You and your ex-spouse must have been married for at least 10 years.
  • You must be divorced from your ex-spouse for at least two consecutive years.
  • You must be currently unmarried.
  • Your ex-spouse must be entitled to Social Security retirement or disability benefits.
  • The benefits you would have received from your work record must be less than the spousal benefits. 3,4

Spouses enjoy a lot of flexibility thanks to Social Security spousal benefits. As you near retirement, you’ll want to explore your options on how best to take advantage of the program and maximize your benefits.


  1. https://www.cnbc.com/2021/09/02/how-claiming-social-security-early-affects-your-spousal-benefits.html
  2. https://www.bankrate.com/retirement/social-security-spousal-benefits/
  3. https://www.marketwatch.com/story/how-do-i-claim-social-security-from-my-exs-earnings-11630534142
  4. https://www.investopedia.com/ask/answers/110614/how-does-my-spousal-social-security-benefit-work.asp

This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.

Social Security and Retirement Earnings

The fact that you’ve decided to retire doesn’t necessarily mean you want to stop working. Retirement is a great time to explore alternative career options, try your hand at a new career, or work part-time to add a little extra cash to your bottom line every month.

However, continuing to work while collecting social security can affect your monthly benefits if you claim these before your full retirement age. Your full retirement age depends on the year you were born, so make sure you’re aware of this criterion before you claim benefits. ¹

The first and most important thing to know is that once you reach full retirement age, or age 70 (the maximum age at which you can continue to accrue benefits), there is no limit to how much you can earn. Once you’ve reached full retirement age, you are fully vested in the social security system, so your
benefits won’t be reduced. ²

However, if you continue working after you’ve retired before your full retirement age and are claiming social security, your benefits could be affected.

  • Your Social Security benefits might be temporarily reduced. If you opt to work while receiving social security before your full retirement age, you will only be able to receive a certain level of income before your bene t is temporarily reduced. In 2022, the social security earnings limit is $1,630 per month, or $19,560 per year, for someone who has not reached full retirement age. If you earn more than this amount, you can expect to have $1 withheld from your social security benefit for every $2 earned above the limit.¹ ²
  • The Social Security earnings limit depends on your age. Your full retirement age is based on the year you were born. The full retirement age for anyone born between 1943 and 1954 is 66 years old. Individuals born in 1960 or later have a full retirement age of 67.2,3
  • You might be eligible for a higher Social Security bene t later. The limit mentioned above changes the year you reach full retirement age. During this year, you lose only $1 of benefits for each $3 you earn above the limit until the month you reach full retirement age. Furthermore, the earnings limit goes up the year you reach this age. For 2022, the earnings limit for the year of full retirement age is $51,860. 4

Your best bet might be to continue to delay taking social security benefits until your full retirement age or later. Talk with your financial advisor to review your situation and determine when claiming social security is right for you and your family.


  1. https://www.cnbc.com/select/social-security-retirement-earnings-test-how-it-works/
  2. https://money.usnews.com/money/retirement/social-security/articles/what-happens-if-you-work-while-receiving-social-security
  3. https://www.ssa.gov/pubs/EN-05-10035.pdf
  4. https://www.forbes.com/sites/bobcarlson/2022/01/24/heres-how-working-after-62-can-change-your-social-security-benefits/?sh=5c586eff679d

This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.

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MOKAN Wealth Management is an Investment Advisor registered with the State of Kansas. This communication is not intended as an offer or solicitation to buy, hold, or sell any financial instrument or investment advisory services. Any information provided has been obtained from sources considered reliable, but we do not guarantee the accuracy, or completeness of, any description of securities, markets, or developments mentioned. Please contact us at (913) 257-3991 if there is any change in your financial situation, needs, goals or objectives, or if you wish to initiate any restrictions on the management of the account or modify existing restrictions. Our current disclosure brochure, Form ADV Part 2, is available for your review upon request, and on the SEC’s website at www.adviserinfo.sec.gov.