Risks of Investing
What is it called when you spent too much and don't have any extra money to invest wisely?
Splurging money
DOUBLE POINTS: Mention 2 ways to save money
Budget, cancel unnecessary subscriptions, pay off debt, buy in bulk, meal prep etc.
What are bonds?
A loan from an investor to a borrower such as a company or government
What are stocks?
A security that represents ownership in a corporation/gives a shareholder a share of ownership in the company
What is a good precaution to take when Investing?
Invest in multiple companies, and not just one
DOUBLE POINTS: What is the definition of Investing from the presentation?
Financial activities to make capital gain/ positive return over a long period of time
What is the definition of Savings from the presentation?
Activities to store money to pay for recurring expenses and emergencies
How does investing in a bond work?
The borrower uses the money to fund its operations, and the investor receives interest on the investment.
What is a benefit of investing in stock for the company?
Pay off any existing loans/ To fund any plans of growth
Give at least one way to prevent yourself from Investment fraud
Research before you invest. Verify the person selling the investment. Always ask questions.
Mention at least 3 Investment Instruments
Bonds, shares, commodities, property
Mention at least 2 Saving Instruments
Bank accounts, bank deposits, bonds (<1 year)
Why is it better to invest in long-term bonds?
Higher interest rate
Since stocks have a higher risk than savings accounts, why do people still invest in them?
Higher reward/ Much higher returns
Give 3 examples of commodities [Hint: agricultural products]
Crops: wheat, corn, beef from livestock etc.
Energy products: oil, natural gas, fuel, diesel, electricity etc.
Metals: gold, silver and aluminum etc.
Mention at least 2 risks of Investing
Much higher return, takes time to convert into cash, value of the asset is volatile (can go up or down)
Mention the pro and con of Saving
Low return, can easily convert to cash with little cost
Mention at least 2 risks of investing in bonds
- When interest rates fall, bond prices rise.
- Having to reinvest at a lower rate than what the funds were previously earning
- When inflation increases, bonds can have a negative rate of return
- Low liquidity in some bonds can cause price volatility
DOUBLE POINTS: What is a stock market?
A group of markets and exchanges where regular activities such as buying, selling, and issuing shares take place.
What is our speaker's name for this session? [Please use Mr/Pak when you say his name]
Adi Hartono
[First or last name is fine]
What is the number one risk of investing in a company?
Investing too much and having that certain company crash
Why do people save money?
For purchases or emergencies/ meet short-term financial goals and prepare for unexpected situations
DOUBLE POINTS: What is the difference between stocks and Corporate bonds?
Corporate bonds are lending money on interest. Stocks you are buying a portion of the company.
What is diversifying your portfolio?
Choosing different companies
DOUBLE POINTS: Name of this CAS Project?
MoneyMatters