Personal Finances Chp 2 Flashcards
KISS
Keep it simple stupid
Never invest purely for:
Never invest using
Tax savings
Borrow money
Spread around
Diversification lower risk
Combined assess of the investments company institutes
$12,356
8015 mutual funds since October 2007
% of teens know how to invest money to make it grow
22%
% of teens report that their main reason for savings is to have enough money for long term future plans
51%
% of teens have a stocks investments in an account that is held in their name
12%
SEC
Securities exchange commission
Sec
Is the government agency regulating the stock market
Sec crested?
1934 to increase public trust
With virtually all investments
As the risk goes up so does the potential return.
Discussing investments blank is availability
Liquidity
As there is more liquidity there is typically
Less return
ACD
Is a certificate of deposit typically at a bank
Money market mutual fund are
Low risk money makers account with checking privileges
Great for emergency fund
Single stock investing carries an extremely
High degree of risk
When you buy stock you are buying a small piece of
Ownership in the company
Your return comes as the company increase in
Value or pays you some of the profits dividends
Bond
Is a debt instrument by which the company owes you money
Your return is
The fluctuation in price and the interest rate paid
Investors pool their
Money to invest
Portfolio managers manage the
Pool or fund
Your return comes as the value of
The fund is increased
Mutual funds are
Good long term investments
You should ha e lots of blank before using real estate as an investments
Cash
Annutities
Are savings account with an insurance company
Fixed annuities
Are at a low interest rate of around 5%, arentreally fixed and are a bad investment
Variable annuities
Are mutual funds sheltered by the annuity covering thereby allowing the mutual fund to grow tax deferred
Horrible investments
Gold
Commodities & futures
Day trading
Viaticals
Mutual fund ( are properly diversified will have investments dollars spread among 4 financial assets)
25% international
25% aggressive growth
25% growth
25% growth and income
