Risky Business
You should use this investment strategy to ensure you don’t put all your financial eggs in one basket and end up with only empty shells of a portfolio.
What is Diversification?
Get the crystal ball and grab your tarot cards, because this strategy attempts to predict the market and outguess all the other investors and non-believers
What is Market Timing?
If the market were a gym, this investing style would be constantly sprinting, lifting, and trying to beat its PR on the bench press.
What is Active Investing?
This bond is issued by cities and states, making it NC State’s Russell Wilson of the bond world…but instead of touchdowns, it has tax advantages.
What is a Municipal Bond?
This type of fund moves on the stock market all day long, like what a mutual fund would be running on three Monsters and a pot of coffee.
What is an ETF?
Like Harry, Ron, & Hermione or Luke, Han, & Leia, strategic asset allocation has a golden trio of these types of investment classifications (name all three).
What are Stocks, Bonds, and Cash?
This approach is like thrift-shopping the stock market: looking for something everyone else overlooked but is secretly worth more than the price tag suggests.
What is Value Stocks or Value Investing?
Get your floaties and swim trunks, this is a quality that allows investors to quickly turn an investment into cash without losing much value.
What is Liquidity?
While this bond might not be boasting straight AAAs on its report card, being a BBB- student is still good enough for it to get this type of grade.
What is Investment or Investment Grade?
The “all-you-can-eat buffet” of investments. 20 different courses all on one plate, but beware the fees the chef charges.
What is a Mutual Fund?
A firefighters favorite strategy, this spreads your investments across multiple “rungs” of investments that mature at different times.
What is a Bond Ladder or CD Ladder?
This classification of investment is the “we’re not like the other assets” branch of the family; real estate, commodities, crypto, and other relatives who don’t hang out with stocks and bonds, but still show up at Thanksgiving asking for a plate of the portfolio pie.
What are Alternative Investments?
Stretching out like a beautiful rolling landscape in front of you, the amount of time before you will need access to your invested money is known as this.
What is a Time Horizon?
Backed by Uncle Sam, this investment is the financial equivalent of James Bond: steady, dependable, and never missing a payment.
What is a Treasury Bond or T-Bond?
Like a subscription you meant to cancel but never got around to, this recurring fund cost quietly renews in the background and steadily reduces what you actually keep.
What is the Expense Ratio?
Even if you own 500 different stocks, this risk is like a Looney Tunes rerun; you can switch episodes all you want, but Bugs Bunny will always be asking, “What’s up doc?”
What is Nondiversifiable Risk?
This strategy avoids “emotional investing” the same way grad students survive burnout; by sticking to a routine, investing the same amount regularly instead of trying to “perfectly time” every decision…even when you’re running on caffeine and deadlines.
What is Dollar-Cost Averaging?
If your investment plan has to account for taxes, legal rules, or personal situations like needing cash soon, you’re dealing with these built-in limitations.
What are Constraints?
Not all investors love commitment, and this bond is perfect for the avoidants. It gives the issuer the right to pay back the debt early, which means buyers usually get paid a higher coupon rate for that uncertainty.
What is a Callable Bond?
I hope you’re not claustrophobic, because this type of fund has no automatic exit or entry price. If you want out, you need someone else willing to take your place.
What is a Closed-End Fund?
I’ve got decades to ride the market’s waves,
While the nest egg saves.
I can take chances, bold and free
What trait is higher in me than thee?
What is Risk Tolerance?
I borrow what I don’t own, sell it off in haste,
Hoping prices drop so I can buy it back at a cheaper pace.
If I’m wrong, the losses have no ceiling in sight,
What risky move am I taking in the market fight?
What is Short-Selling?
This portfolio adjustment is like realizing your “organized” bookshelf has turned into chaos: some books are now towering like overgrown skyscrapers while others have been pushed into the shadows. So you line everything back up to match your original design.
What is Rebalancing?
___ food. ___ mail. ___ yard. These ___ bonds have lower credit ratings but higher potential returns.
What are Junk Bonds?
I start out bold, wild and free,
But I slowly shift as retirement nears me.
I auto-adjust, so you don’t derail,
I’m this fund on your financial trail.
What is a Target Date Fund?