Portfolio 101
While this isn't a view of the sunset, in investing it represents the distance between today and when you’ll actually need your cash.
What is the time horizon?
This online platform was not only declared the top-tier choice among its peers by a unanimous class submission, but is also Bonnie’s favorite
What is Fidelity?
Despite its no-frills approach and low fees, this type of fund often beats the high-priced competition at their own game
What is an index fund?
A fund where a manager tries to pick winners, but often just ends up picking up extra costs and taxes.
What is an actively-managed fund?
In reality, long-term investors are more likely to lose money by doing this instead of staying invested
What is timing the market/panic selling?
While some investors love the 'Roller Coaster' of high-growth stocks, others prefer the 'Merry-Go-Round'; this term describes which ride you can actually handle.
What is risk tolerance?
A term that Bonnie uses often, you might go to the barber for one of these, but you don't want your mutual fund giving one to your retirement savings.
What is a haircut?
You won't need to circle the day on your calendar, but this fund is named for the specific year you plan to stop working and start spending.
What is a target date fund?
The kind of stock that doesn’t need to introduce itself—your grandma already owns it, and so does half the S&P 500
What is large cap stock?
The article suggests that in environments of war and inflation, bonds are exposed to both interest rate risk and this additional macroeconomic risk
What is inflation risk?
While it sounds like a place to sit in a park, in your portfolio it’s the point of reference used to see if your investments are actually beating the market?
What is a benchmark?
This was Randy Jackson’s investment objective
What is saving for retirement?
This "hands-off" strategy involves buying a fund that mirrors an index like the S&P 500, usually resulting in lower fees and higher tax efficiency.
What is passive investing?
Instead of selling stocks and triggering taxes for everyone, this investment vehicle uses 'in-kind redemptions' with an authorized participant to keep things tax-efficient
What is an ETF?
They’ve got charts, hot takes, and just enough confidence to make ‘buy the dip’ sound like professional advice—even if their only license is a ring light
What are finfluencers?
You don't have to be a genius to set these investment objectives, but you do need to make sure they are Specific and Measurable.
What are SMART goals?
It’s the digital 'C-3PO' of the financial world; these platforms use software to automate the Strategic Asset Allocation process at a fraction of the cost of a human RIA.
What is Robo Investing?
While it sounds like a gymnastic move on a beam, this is the 'spring cleaning' for your portfolio that brings your asset classes back to their original target percentages.
What is rebalancing?
In the spectrum of allocation models, this one sits at the opposite end of "Conservative" and is designed for investors with a long time horizon and high risk tolerance.
What is growth?
In a world where bonds are supposed to be the calm corner of investing, this is what happens things slow down, yields jump like a startled male deer, and inflation keeps running the show - leaving fixed income stuck in the worst of both worlds
What is stagflation?
Think of it as a 'Pre-nuptial Agreement' between an investor and their advisor; it outlines exactly how the relationship will work before the first dollar is even spent.
What is an Investment Policy Statement (IPS)?
Especially if you’re Randy Jackson, Bonnie (and the class) advises that you shouldn’t necessarily be investing in these.
What are individual stocks?
As long as you don't build your house upon the sand, this physical investment vehicle will provide you with lasting value.
What is real estate?
A stationary method of vertical transportation for your money, this fixed-income strategy involves both timing and staggering.
What is a bond/CD ladder?
Named after a 1960s cowboy flick, Jason Zweig argues that the fear surrounding these tech giants is a 'marketing myth' designed to get you to hire expensive active managers to avoid the 'concentration monster'.
What is the big 7/Magnificent 7?