Investment Types
This investment type is very liquid but has almost no ROI at all. You can set one up in most banks.
Savings Account
How does a company become available on the market for trading?
Through an IPO
What is the main point of investing?
To make a profit.
How many sectors did we cover in class?
9
What are the 4 ways to diversify your investments?
Across types
Across sectors
International vs Domestic
Long Term vs Short Term
Treasury and Bond also mean what?
Government and Loan
What does it cost to list on the NYSE and NASDAQ?
NYSE - $250,000
NASDAQ - $150,000
What does ROI stand for?
Return on Investment
Describe what the conglomerate sector is and give me an example.
It is a company that offers more than one product that are not related to one another.
P&G and J&J.
What does IPO stand for?
Initial Public Offering
Explain what a Corporate Bond is.
Investor lends money to the corporation and in return, the corporation pays the investor interest.
What does it cost to renew on the NYSE and NASDAQ
NYSE - $500,000
NASDAQ - $60,000
What is the formula for ROI
R-I/I * 100
What is the biggest portion of the utilities sector?
Electricity
What is a market index?
A method of measuring a section of the stock market.
Real Estate can have a very high ROI, however, there is one big problem with real estate investments. What is the big problem?
The investment is not very liquid. It could take a long time to sell which holds up your money.
Why do companies choose to go public in the first place?
If you have I given to you, and you also have the price per share for when you buy and sell, what piece of information must you find before you solve for ROI and Annual ROI?
What are some disadvantages of the health care sector?
Patents expire, there are a number of law suits with these companies all the time and politicians are always inserting themselves in this industry.
Top 30 and they are referred to as the blue chip companies more often than not.
Explain the difference between T Bills and T Bonds
Bills are for the short term, less than a year usually.
Bonds are for the long term of at least 10 years or more.
Who buys stocks besides individual investors and why?
Banks - to make money on your money
Mutual Funds - to build the fund portfolio for its investors.
Other companies - to make more money to invest back into other things, the company itself etc.
If I bought 200 Google Shares in the year 2000 at $115 a share and then sold my shares in 2015 at $755 a share, what is my overall ROI and then my annual ROI?
ROI = 556%
Annual ROI = 37%
List all the sectors by name.
S&P stands for what? What makes up the S&P market index?
Standard and Poors and the fortune 500 companies make up this index.