Investing
Identify 2 things that may impact a stocks price.
The success of the company, the success of an industry, the success of a countries economy etc.
What is a retirement investment account called?
401k
What is the advantage of using software/computers to invest?
They can make decisions quickly, they allow you to not focus on the ups and downs of the market, they can search the internet quickly
When you purchase this from a company, you are lending the company money which it promises to repay with interest at a certain date.
A Bond
Explain the difference between active investing and passive investing.
An active investor directly manages the purchase of stocks and bonds. A passive investor pays a company or person to manage these purchases for them.
When should you start saving for retirement?
As soon as possible.
How can diversification lower your portfolios risk?
By investing in multiple industries and companies, you lower your risk because if one stock fails you still have other investment opportunities.
When this increases, the purchasing power of the dollar decreases - meaning you can buy less in goods and services
Inflation
What is a brokerage account? What makes it different from a bank account?
A brokerage account allows you to invest in the stock market by purchasing stocks and bonds.
Selling it when it goes up in price. Earning dividends if the company is successful.
What does the phrase "Don't keep all of your eggs in one basket" mean when investing?
Diversification.
A retirement savings option that automatically changes the stocks that you are invested in as your retirement approaches is known as a __________
401k
How is a stock different from an ETF?
A stock is a single portion of ownership of a corporation. An ETF is a collection of stocks and bonds from various companies and industries.
Is Nike a small, medium, or large cap company?
Large Cap because it dominates the market share of the sneaker industry.
Why is investment important compared to savings?
Investing often offers a higher interest rate than a savings account.
When someone makes sure to invest in multiple industries and stocks this is known as what?
Diversification
Explain the importance of starting to invest and save early.
It is essential to invest and save as soon as possible, because it gives you more time to save over time. It also means more of your money is increasing due to interest.
What is market cap?
The value of a publicly listed company compared to its overall industry.
Explain compound interest compared to simple interest.
Compound interest compounds your principal with your interest included. Simple interest uses a flat interest rate.
When a company makes a profit, it may choose to pay a part of this profit back to shareholders, this is known as a . . .
Dividend