Investing Flashcards
Rule of 72
estimating number of years required to double money
how to find rule of 72
divide 72 by the percent rate to estimate how many years it’ll take
Securities and Exchange Commission (SEC)
oversees securities exchanges, securities brokers and dealers, investment advisors, and mutual funds in an effort to promote fair dealing
Penny Stock
low priced stocks of small companies that have no track record
Net Asset Value
tells you the market price for a share of a mutual fund
Depreciation
decline in the value of property due to normal wear and tear
Price per earning ratio
the proportion of a company’s share price to its earnings per share
Bonds
-debt obligation
-loans the must be repaid at maturity
Stocks
unit of ownership in a corporation (higher risk than bonds)
Bearer bond
coupon bond
Reinvesting
decreases taxes
Proxy
agreeing to give voting rights to someone else
Who has stock market
kinda a lot of countries
Series EE
bonds are sold at half face value
3 Bs for investment grade bond
B, BB, BBB???????
dividends
money paid to stock holders from the corporation earnings
The prospectus
a legal document that offers securities
capital gain
money made when stock increases
stock index
benchmark that investors use
leverage
borrowing money to invest
shorting
buying into a company hoping they go down
stock split
an increase in the number of out standing shares of a company’s stock
Adv. of MF
professionally managed
liquid
diversified
small min investment
what to look for in mutual fund
-well known
-online location
-physical location
-business for 20+ years
real estate
-buying land and any buildings on it
-always matches or exceeds inflation (appreciates)
par value (face value)
an assigned dollar value given to each share of stock
how many saving bonds are available to buy
20,000
bull market
stocks go up; investors are happy
bear market
stocks go down; no one happy
How many stocks to be diversified
12-15
Mutual funds
professionally managed group of investments bought using a pool of money from many investments
market value
the price for which the stock is bought and sold in the market place
Commonly used indexes
-dow and jones industrial
-standard and poor’s 500
-NASDAQ composite index
Best mutual fund place things
vanguard
charles schwab
TD ameritrade
edward jones
who issues bonds
(loans and mortgages)
home loan corp
student loan
federal housing
municipal bonds
bond issued by state and local govs
risks to investments
politics
company
market
????
low risk
bonds
savings
CD
medium risk
stocks
mutual funds
real estate
annuities
high risk
futures
penny stock
collectibles
options
crypto
