ABC Investing By Shobha Narasimha ABC Investing http
ABC Investing By Shobha Narasimha
ABC Investing �http: //simulator. investopedia. com/
What is Investing? �Why to invest? �What is the catch…. . ? Risk
Risk Of losing money Largest US stock Market Decline 9 2 00 -2 08 20 20 00 -2 00 17 16 -19 74 19 319 03 19 7 19 01 -19 21 -19 19 19 18 96 90 - 07 18 -19 06 19 42 19 -30% 19 19 29 -20% 37 - 93 -1 -10% 2 0% -40% -50% -60% -70% -80% -90% -100% Series 1
Things to Consider �Time Horizon �Risk �Rate of return Risk �Liquidity Risk
Why not keep money under bed? Inflation
Inflation
Type of Investment �Bank Checking – Saving CD Interest taxable, penalty for early withdrawal
Bonds �Short Term < 3 year �Intermediate Term - 3 – 10 years �Long Term > 10 years
Bonds �Treasury bonds – state tax free, federal tax, $1000 multiples, can be traded Treasury bills < 1 year Treasury notes - 1 … 10 years Treasury bonds > 10 years
Bonds �Saving Bonds – Non transferable � TIPS - Inflation adjusted, 5 – 10 years �Municipal bond – federal tax free and tax free for state residents
Saving Bonds �Can be bought directly at treasuarydirect. gov �Low minimum – 25, 50, 75, 100, 200, 500 �Non transferable �EE bonds and I bonds (Inflation adjusted) �Might be tax free if it is used for higher education
Bonds �Corporate Bond A………………Z alphabet soup �Mortgage Bond
Mutual Fund �Mutual Fund - Bond, Stock, Money Market �Expense ratio �No load fee �Diversification �Vanguard, TRow Price
Where to Buy ? �Discount brokers �Scottrade. com �Etrade. com �www. schwab. com
Portfolio and Asset Allocation Portfolio Stock Treasury Bills 8% 10% 30% 5% Treasury bonds and notes international fund Gold REIT 20% 10% 7% Mutual fund - bond Mutual fund - large value
- Slides: 16