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61 Cards in this Set

  • Front
  • Back
what is investing?
The act of committing money or capital to an endeavor with the expectation of obtaining an additional income or profit.
4 common ways money is invested?
stocks, bonds, mutual funds, and real estate
An investment vehicle is
a way to invest
Difference between investing and gambling
gambling takes no thought, investing is an educated guess both have risk
two things required for compounding to work?
re-investment and time
The shorter your time horizon,
the more conservative your investment should be
2 most common investing strategies
growth investor and value investor
Any securities that are founded on debt?
a combination of different investment assets mixed and matched for the purpose of achieving an investor's goal
2 kinds of stock
common and preffered
Explain preferred stock
the company can call the stock back at anytime. it is insured dividends, in between bonds and equity
When was the NYSE founded?
Where is the Nasdaq?
its virtual
where small cap trade takes place
A companies worth =
stock price times number of stocks
Most important factor that effects stock price?
Why do stock prices change?
we don't know
2 main ways to purchase stock?
using a broker and dripsand dips
Drips and dips =
Dividend reinvesting programs and direct investing programs
Chickens and pigs
chickens= scared to lose $, pigs= throw money around waiting for one big investment
4 advantages to mutual funds?
professional management, Diversification, liquidity, simplicity
3 disadvantages
professional management, costs, and taxes
3 kinds of mutual funds?
equity, fixed income, and money market
why are mutual funds not so good?
2 types of mutual fund fees?
yearly fees and transaction fees
should you buy a fund with a load?
hell no
what is nav. Equation
Net asset value = funds assets - liabilites
A loan that is killed over time
compounding will lead to the ___ ____ and discounting leads to
fv, pv
the more frequent the compounding, the
larger the fv
most important method of how to get started on investing?
pay off high interest rate debt CREdit caRDs
3 investment options
bonds stocks realestate
total return on the investment =
gain from sale + dividends
Where is the best average return? worst?
small company stocks, short term treasury bills.
A LT debt instrument in which a borrower makes payments of principal and interest, on speciic dates, to the holder of bond
Face abount of the bond
par value
stated interest rate paid by the issuer of the bond
coupon interest rate
Yrs until bond must be repaid
maturity date
rate of return earned on a bond held until maturity?
yield to maturity
2 types of bonds
government and corporate
how are securities issued?
primary market- Initial public offerings, and secondary- trading
largest in the world established in 1817 with more than 3000 companies, 13 trillion
Amex is commonly called?
the curb
DJIA, S&P500 and NASDAQ composite=
market performance measures
Prolonged declining market. Prolonged rising
bear and bull
Interest rates go up, stocks, and bonds
stocks go up bonds go down.
bull market stocks go bonds go
up down
main contributors to NASDAQ
3 keys to managing your investments
allocate your assets, diversified portfolio, and track your investments
What is asset allocation?
deciding how to distribut investments among asset classes, cash ,stock bonds real estate.
3 main factors that afftect asset allocation?
investment objectives, investment horizon, chemistry
3 kinds of mutual funds listed in increasing risk
money market, bond, and stock
Difference between balanced fund and asset allocation fund?
balanced is a fixed % between stocks and bonds, asset= more flexible %
Value funds?
buy on stock that is lower then it should be
Value of assets-Liabs over number of shares
12b-1 fees cover?
Passively managed and taded on listed exchanges, no harvard MBA on computer=
Exchange traded funds
Value of large cap co= , mid=, small=
>9bill, 1.6-9 bill, and <1.6
Market value =
number of shares X price
These companies typically have relatively low growth rates, high dividend yields.
typically have realatively high growth rates, low dividend yields