Investing Basics
What is investing?
Putting money into something to grow it over time.
What is a stock?
small ownership share in a company.
What does “risk” mean in investing?
The chance of losing money.
What is a portfolio?
A collection of investments owned by an individual or organization.
What is a bond?
you give to a company or government that pays interest.
What is the primary goal of investing
To grow wealth over time.
What is a mutual fund?
A collection of stocks and bonds managed by professionals.
How can investors reduce risk?
diversifying their portfolio.
What is a bull market?
A market where prices are rising or expected to rise.
Which type of bond is considered the safest?
Government bonds.
What is compound interest?
Interest earned on both the initial investment and previous interest.
What is a long-term investment strategy?
Investing in stocks for decades.
What does high risk tolerance mean?
comfortable with market ups and downs.
What is a bear market?
A market where prices are lowering or expected to decrease
What is a corporate bond?
A loan to a company that pays interest.
Why is it important to start investing early?
To benefit from compound interest and long-term growth.
What is emotional decision-making in investing
Making choices based on feelings, which can lead to poor outcomes.
What role does risk tolerance play in investing?
It guides how aggressive or conservative your strategy should be.
What is the NYSE?
New York Stock Exchange
Why might someone choose a bond over a stock?
Bonds are generally less risky and provide steady income.
What is dollar-cost averaging?
Investing a fixed amount regularly, regardless of market price
What is a potential risk of investing in the stock market?
Market volatility
What investment typically has the highest risk and reward?
Individual stocks.
What is the average annual return for stocks historically?
10%
What happens to bond prices when interest rates rise?
Bond prices typically fall when interest rates go up.