Personal Finance Pt 2

Question 1

Market Movers

Answer 1

Supply & Demand

Fear / Greed

News (sometimes)

Question 2

Individual Stock Movers

Answer 2

1. Above estimated profits
2. Growth prospects change
3. Change in interest rates
   * day to day movers are more ambiguous

Question 3

Bonds

Answer 3

Better to preserve capital is US bonds and make big bets on junk bonds

Question 4

% Allocation in cash

Answer 4

5-10%

Question 5

Real Estate

Answer 5

returns comparable to common stock but provide enough diversification

Question 6

Types of Real Estate Assets

Answer 6

commercial properties, land townhomes, real estate investment trusts

Question 7

Pros of Home Ownership

Answer 7

Reduced tax bill from interest payments

Path to ownership

Question 8

Cons of Home Ownership

Answer 8

There will be expenses that do not build equity

Mortgage payments are cash intensive and restrict investment abilities

Question 9

529

Answer 9

Post-tax contribution at federal / state level that compound and can be withdrawn tax free if for ed.

Can be placed in childs name but you will get less financial aid

Question 10

Coverdell

Answer 10

education IRA

tax differed at withdrawal and maybe account

2000/yr