Hello Pallen.
First of all, OTC, NYSE, NASDAQ, are not types of trading. They are stock exchanges.
I say, study first and then take on a bit of risk. Investing money is not a way to learn types of trading. You could begin with http://en.wikipedia.org/wiki/Financial_market to sort out some of these terms.
You can do a HUGE amount of learning on your computer. Other places to learn are http://moneycentral.msn.com/investor/home.aspx,
http://www.fool.com/investing/index.aspx?source=ifltnvpnv000000, https://order.investorplace.com/index.jsp?sid=SE3138uid=68.164.3.65-1275170261345065, http://club.ino.com/trading/, and
http://www.topstockportfolios.com/ as well as many many other free sites. Once you get started, one leads you to another. You could become familiar with Elliot Wave Theory. Its a little different and I don’t think its mucked up with day traders…but who knows. Type “Robert Precter” into Google and enter a new world. Its certainly not the only world but one with which you can familiarize yourself. At least you’d be way ahead of the game when its time to plunk your money down.
Listen to Trails. Trails had a purrrfect answer. Trails, will you marry me? Love the chapeau.
Gail, I think bond funds are one of the worst investment vehicles around. Historically, they carry the downside of individual bonds (low return) but with no specific rate/date of return. There is no fixed point the investor is guaranteed of a certain amount of money which is the advantage of owning individual bonds. A bond fund can decrease in value by the time you want to sell it. In addition, there are fees that erode profit. At least that’s what my daddy told me. Caveat. Vanguard’s Bond Fund (VFIIX) appears to be one of the best of that breed.