Investment Basics Stock & Bond Basics Mutual Fund Basics Retirement PlanningBuying a Home 161611616 272722727 38333838 4944494 5555105.

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Presentation transcript:

Investment Basics Stock & Bond Basics Mutual Fund Basics Retirement PlanningBuying a Home

These types of investments have guaranteed rates of return. What are bonds money market accounts and savings accounts?

These types of investments do not have guaranteed rates of return. What are stocks and mutual funds?

This is the maximum amount of a deposit insured by the FDIC (as of October 3, 2008). What is $250,000?

If an investment earned you 10% over a year and the inflation rate was 3% during that same year, then the real rate of return on that investment was this percentage. What is 7%?

When the stock market has stock prices that are flat or decreasing, it is referred to as this. What is a bear market?

When the stock market has stock prices that are increasing, it is referred to as this. What is a bull market?

The 3 ways financial planners get paid. What are commissions from the funds they represent that you buy, a percentage of the money you invest, and a flat hourly fee?

This term refers to spreading your risk among a wide variety of investments. What is diversification?

This is how you should change your investment portfolio as you get older. What is shift a larger percentage of your portfolio into safer investments?

STOCK or BOND: this type of investment is part ownership of a company. What is a STOCK?

STOCK or BOND: this type of investment is a form of loan to a company. What is a BOND?

STOCK or BOND: this type of investment will never be paid back by a company. What is a STOCK?

STOCK or BOND: this type of investment will be paid back by a company on its maturity date. What is a BOND?

You can buy a share of stock in these two ways. What are directly from the company and from a broker?

LARGE CAP or SMALL CAP: this stock is a large company that normally has relatively stable stock prices. What is LARGE CAP?

LARGE CAP or SMALL CAP: this stock is a small company that may have more growth potential since the stock price is usually relatively low. What is SMALL CAP?

This type of investment buys a broad range of stocks and/or bonds, making it easier for you to diversify a limited amount of investment money. What is a mutual fund?

MANAGED FUND or INDEX FUND: this type of fund has relatively low expense fees paid by holders of the fund. What is an INDEX FUND?

MANAGED FUND or INDEX FUND: this type of fund’s performance is easy to track because it normally mirrors the Dow Jones Industrial Average, Standard & Poor’s 500, or other similar statistics. What is an INDEX FUND?

MANAGED FUND or INDEX FUND: this type of fund is run by experienced funds managers who try to ensure only stocks that are increasing in price are held by the fund. What is a MANAGED FUND?

The fees normally associated with mutual funds. What are front end load back end load and annual expense ratio?

The age at which you can retire and receive reduced benefits under Social Security. What is 62?

The age at which you can retire and receive full benefits under Social Security. What is 67?

The percentage of your pre- retirement income that is normally replaced by Social Security. What is 40%?

This type of retirement plan is an arrangement where your employer continues to provide you income, even after you retire. What is a pension?

The features of a 401(k) plan. What are money is normally deducted from your paycheck before you see it, many employers often match up to a certain percentage of your contribution, and your contributions are not taxed until withdrawn at retirement?

TRADITIONAL IRA or ROTH IRA: this type of IRA allows you to deduct some or all of your contributions from your taxable income. What is a TRADITIONAL IRA?

TRADITIONAL IRA or ROTH IRA: this type of IRA’s contributions cannot be deducted from your taxable income. What is a ROTH IRA?

TRADITIONAL IRA or ROTH IRA: with this type of IRA you can withdraw any of your contributions without paying a penalty. What is a ROTH IRA?

TRADITIONAL IRA or ROTH IRA: with this type of IRA you will pay a penalty if you withdraw your contributions before age 59. What is a TRADITIONAL IRA?

The types of people who can use a Keogh plan for their retirement savings. Who are self-employed professionals, small business owners, and employees of small businesses?

The maximum recommended percentage of your monthly pre-tax income that you should spend on housing costs. What is 28%?

The maximum recommended percentage of your monthly pre- tax income that should be debt. What is 36%?

A “point” is this percentage of the loan amount. What is 1%?

A “point” that you pay to reduce the interest rate on your mortgage is called this. What is a discount point?

A “point” that you pay to cover the various processing expenses for your mortgage is called this. What is an origination point?

A mortgage in which the APR is set at closing and you make payments on the mortgage for a very long time until it is paid off is called this. What is a fixed-rate mortgage?

A mortgage in which you only make payments for a relatively short period of time (5 – 7 years) at which time the entire balance on the loan is due is called this. What is a balloon mortgage?

To determine how much of your home you actually “own” you subtract your current loan balance from this amount. What is the current market value?