Name___________________________ Study Skills
Foundations in Personal Finance
Unit 2: Investment Options
Learning Outcomes
-Explain the KISS rule of investing.
-Examine the relationship between diversification and risk.
-Compare and contrast different types of investments: money markets, bonds, single stocks, mutual funds, rental real estate, and annuities.
Key Terms
Diversification
Liquidity
Mutual Fund
Risk
Risk Return Ration
Share
KISS Rule of InvestingKeep it ______________,______________!
Never invest purely for _______________ ______________.
Never invest using ________________ money.
Diversification_________________ means to spread around.
Diversification ______________ risk.
Risk Return Ratio and LiquidityWith virtually all investments, as the ____________ goes up, so does the potential return.
When discussing investments, ____________ is availability.
As there is more liquidity, there is typically _________ return.
Types of Investments
1. Money MarketsA C.D. is a ___________ ____ ____________, typically at a bank.
Money market mutual funds are _____________ risk money market accounts with check writing privileges. These are great for
_____________ _____________.
2. Single Stocks
Single stock investing carries an extremely _____________ degree of risk.
When you buy stock, you are buying a small piece of _____________ in the company.
Your return comes as the company increases in _____________ or pays you, its owner, some of the profits (_____________).
3. Bonds
A bond is a _____________ instrument by which the company owes ______ money.
Your return is the fluctuation in price and the ___________ rate paid. Few individuals do well with ___________ __________ purchases.
4. Mutual Funds
Investors pool their _____________ to invest.
Portfolio managers manage the pool or _____________.
Your _____________ comes as the _____________ of the fund is increased.
Mutual funds are good _____________ term investments.
5. Real Estate
Least _____________ consumer investment.
You should have lots of _____________ before using real estate as an _____________.
6. AnnuitiesAnnuities are _____________ accounts with an _____________ company.
_____________ annuities are at a low interest rate of around 5%, aren’t really fixed, and are a _____________ investment.
_____________ annuities are mutual funds sheltered by the annuity covering, thereby allowing the mutual fund to grow tax deferred.
Horrible Investments
Gold
_____________ and Futures
Day ___________
Viaticals
Foundations in Personal Finance
Unit 2: Investment Options
Learning Outcomes
-Explain the KISS rule of investing.
-Examine the relationship between diversification and risk.
-Compare and contrast different types of investments: money markets, bonds, single stocks, mutual funds, rental real estate, and annuities.
Key Terms
Diversification
Liquidity
Mutual Fund
Risk
Risk Return Ration
Share
KISS Rule of InvestingKeep it ______________,______________!
Never invest purely for _______________ ______________.
Never invest using ________________ money.
Diversification_________________ means to spread around.
Diversification ______________ risk.
Risk Return Ratio and LiquidityWith virtually all investments, as the ____________ goes up, so does the potential return.
When discussing investments, ____________ is availability.
As there is more liquidity, there is typically _________ return.
Types of Investments
1. Money MarketsA C.D. is a ___________ ____ ____________, typically at a bank.
Money market mutual funds are _____________ risk money market accounts with check writing privileges. These are great for
_____________ _____________.
2. Single Stocks
Single stock investing carries an extremely _____________ degree of risk.
When you buy stock, you are buying a small piece of _____________ in the company.
Your return comes as the company increases in _____________ or pays you, its owner, some of the profits (_____________).
3. Bonds
A bond is a _____________ instrument by which the company owes ______ money.
Your return is the fluctuation in price and the ___________ rate paid. Few individuals do well with ___________ __________ purchases.
4. Mutual Funds
Investors pool their _____________ to invest.
Portfolio managers manage the pool or _____________.
Your _____________ comes as the _____________ of the fund is increased.
Mutual funds are good _____________ term investments.
5. Real Estate
Least _____________ consumer investment.
You should have lots of _____________ before using real estate as an _____________.
6. AnnuitiesAnnuities are _____________ accounts with an _____________ company.
_____________ annuities are at a low interest rate of around 5%, aren’t really fixed, and are a _____________ investment.
_____________ annuities are mutual funds sheltered by the annuity covering, thereby allowing the mutual fund to grow tax deferred.
Horrible Investments
Gold
_____________ and Futures
Day ___________
Viaticals
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