Stocks
In what circumstance should you sell a stock when you haven’t made any money?
When the price keeps dropping, and you don’t think it will come back up anytime soon so you sell to not lose more money.
Why do Governments and Muncipalties issue Bonds/ what is a bond?
Bonds are issued to raise money. The bond is essentially an IOU that promises to pay an investor over life of the bond. Its of way of safely investing with minimum risk.
How should you know when and when not to take risks in investments like stocks?
Based on the amount of disposable income available to the investor.
How does one diversify their portfolio?
A portfolio can be diversified by purchasing shares in different industries and companies.
Savings accounts are insured by the FDIC for up to $_______.
$250,000
How do people have a general idea on when to buy and sell a stock?
People can look at the company's financials, current world developments/news, and new technologies to make predictions on companies.
Name 5 main types of Bonds
Corporate Bonds, Savings, Agencies, Municipal, and Treasury Bonds
True or false- Bonds have a higher risk than stocks.
False
How do you know a stock is going to go up in price?
There is no way to be fully sure that a stock will rise in price.
What is the recommended percent an individual should save each month?
15-30%
What is the specific name of a market where stocks are sold in the US.
NASDAQ, NYSE
What is the difference between a high yield bond and a normal bond?
High Yield savings reward you with a higher interest rate allowing your money to grow faster just sitting in your account. On the other hand normal bonds is a safer investment and builds more money over time, unfortunately you can not redeem your bonds for the first 5 years or penalty will be issued.
What are the three types of risk levels associated with stocks
Conservative, moderate, speculative
Rank these in order from least to greatest risk: Stocks, Bonds, Mutual funds
Bonds, mutual funds, stocks
What is interest rate?
Price paid for the use of credit.
Name two stock market sectors.
Energy, industrial, real estate, financials, health care, communication services
Why would someone prefer a high yield bond to a normal bond?
Risk tolerance is……?
The ability to accept and absorb losses
What happens to a stock in a bear market?
The stock’s price drops.
What percentage of monthly income does the average American save each month?
6-8%
How can an investor make money from their stocks? (list one of two ways)
Selling the stock at a higher price than it was bought for, or receiving dividends.
Stocks VS Bonds
With stocks you own a small portion of the company. With Bonds you loan a company or the government money.
Blue chip dividend stocks, quickly increasing in value at a higher rate than other competitor corporations are an example of whate type of risk
What does the M stand for in SMART investments? (Hint: ResponSible, M_______, ProfitAble, CeRtain, InvesTments.
Manageable
What is Roth IRA?
In simple terms a Roth IRA is a retirement savings account where you contribute after-tax dollars and withdraw tax-free dollars.