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
