Know your Securities
What type of investment represents ownership in a company?
What is a stock (or equity)?
What’s the basic rule of risk and return?
he higher the potential return, the higher the risk.
What does it mean to “diversify” your portfolio?
Spread investments across different assets to reduce risk.
Which account is most tax-efficient for long-term growth: Roth IRA, Traditional IRA, 401K, or Checking?
What is a Roth IRA?
What’s the name of the short-term cash reserve you should have before considering riskier investments?
What is an emergency fund?
This security type involves lending money to a company or government in exchange for interest.
What is a bond?
If your investment goal is in 2 years, should you be high-risk or low-risk?
What is low-risk?
According to Harry Markowitz, diversification is the only... what?
Free lunch in investing.
What’s one reason to rebalance your portfolio regularly?
To maintain your original risk allocation.
What is the biggest risk of all?
Not taking one
ETFs and mutual funds both bundle assets, but only one is passively managed. Which one?
What is an ETF?
Which two factors are part of your personal risk score, according to today’s presentation?
What are time horizon and income stability?
If one stock crashes but others rise, what effect does diversification have on your portfolio?
It smooths out the impact / reduces total loss.
What part of investing helps you avoid buying at market highs and selling at lows?
What is dollar-cost averaging?
This type of retirement account is often offered by employers, may include matching contributions, and is funded with pre-tax dollars.
What is a 401(k)?
Name one key difference between an option and a stock.
Options are contracts with expiration; stocks represent ownership and have no expiration.
What type of investment loses value over time due to “time decay”?
What is an option contract?
What is it called when you own multiple sectors like tech, energy, and healthcare?
Sector Diversification
What is the term for managing your emotions so they don’t drive investment decisions?
What is behavioral discipline (or emotional intelligence)?
Name the three popular indexes, and what is the best known ticker that tracks them?
S&P 500 (SPY), NASDAQ (QQQ), Dow Jones (DJIA)
This alternative investment allows you to invest in real estate without owning physical property.
What is a REIT (Real Estate Investment Trust)?
This historic market event in October 1987 saw the Dow Jones drop over 22% in a single day, shaking investors’ confidence worldwide. It is notoriously referred to as
What is Black Monday?
What did Warren Buffet say about diversification?
Must get 12/17 words right
"Diversification is protection against ignorance. It makes very little sense for those who know what they’re doing."
This strategy adjusts your portfolio based on economic indicators like inflation, interest rates, and GDP cycles — rather than just personal goals.
What is tactical asset allocation (or aligning with macroeconomic cycles)?
What does the SIPC protect you from?
What is brokerage firm bankruptcy?