ETFs
What does ETF stand for?
Exchange Traded Fund
Why is diversification important to investing?
You reduce the chances of a big loss.
What is the #1 enemy of bad decisions in investing?
Emotions
What is a stock?
A stock is a small piece of ownership in a company.
When you buy a stock, do you own a piece of the company?
YES!!!
Is an ETF considered a long-term investment or short-term?
Long-term
If you had $10,000 invested in a company you believe in, but it plummets due to public scrutiny about horrible moves the company is making, are you:
-Selling
-Buying
-Sticking it through?
(Trick Question!) That answer is up to you!
What is the logic behind risk/reward thinking when it comes to stocks?
Low risk = Low reward
High risk = High reward
What is compounding interest?
Money growing on money.
Why is saving different from investing?
Saving is very low risk, there is easy access to it, and there is some slow growth.
Investing involves more risks, can be hard to access the money, and the growth can fluctuate.
Is an ETF or a "regular" stock more safe to invest in?
An ETF.
What do you think risk tolerance is?
An individual's comfortability with the possibility of losing money. A good example of this could be investors with crypto.
If the U.S were to put a ban on electricity in cars, what would happen to a company like Tesla?
It's probably going to crash.
How can someone make money from investing in a stock?
They receive dividends or they sell the stock at a higher price than what they bought it for.
What is a stakeholder?
A person with an interest or a concern in something, especially a business.
ETF's have multiple companies that they invest in. Regular stocks are just one company.
What is investing NOT?
Gambling, Get-Rich-Quick schemes, and "Guaranteed Money"
Exiting the market because that's what everyone else is doing.
What are factors that can influence the stock market?
Supply & Demand, News about the company, Anticipation about upcoming events, etc.
Why is Crypto so popular right now?
The technology age
Crypto is believed to be the next "currency"
Which ETF has the strongest reputation historically? (Hint: It's an acronym and I told you about it yesterday)
(Acronym Ex: ACN, DIS, NMS)
Vanguard S&P 500 aka VOO.
Nancy is new to investing and is eager to get started. All of the following are things she should do EXCEPT:
- Use all of her money to invest in multiple stocks
- Keep the money that she has in her savings account, instead of pulling it out to invest.
- Pick individual stocks to see if she can beat the market
Pick individual stocks to see if she can beat the market.
How can you keep up to date on events that could effect the stocks that you buy?
Reading the news, paying attention to world events, and regularly researching the companies you invest in.
If a stock costs $623, but you only have $250 to invest, could you still buy that stock?
Yes! It's only a portion of the stock, but you still can.
Why is starting young so important?
You have time to practice patience, build up your funds, and practice consistency!
($83 a month can get you from $1000 total invested a year, to $57,000 in 20 years)