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3. Financial Markets The place where entities with surplus funds and those requiring funds transact business. The financial market comprises: Money Market Bond Market Stock Market

4. Money Market The market place where debt instruments that matures within one year are purchased and sold.

5. Money Market Instruments Certificate of Deposits Money Market Funds Repurchase Agreements (Repos) Commercial Paper Treasury Bills

6. GOJ Treasury Bill

7. BOJ Repurchase Agreement

8. Bond Market It is the market-place for the purchase and sale of debt instruments that expires in over one year.

9. Bond Market Instruments A bond is a medium to long term loan that pays interest during a fixed term. Types of bonds are: Government Bonds Corporate Bonds

10. GOJ VR LRS

11. GOJ FR LRS

12. GOJ Investment Debenture

13. Stock Exchange or Stock Market An organized marketplace where buyers and sellers are brought together to buy and sell stocks and must follow certain rules, regulations and guidelines.

14. Stocks/Shares Certificates representing ownership in a corporation and the appropriate claim on the corporation's earnings and assets. There are two types of stocks: Preferred Stocks/Shares Common Stocks/Shares

15. Investing A process of wealth accumulation involving the purchase and sale of assets and management of the risk/ return dynamics.

16. Fundamental Concepts in Investing

17. Risk and Volatility Inflationary risk Investment or credit risk Interest rate risk When considering your own risk tolerance, you should understand that investments associated with higher risk typically offer higher reward potential over time. A key factor to successful investing is to identify which types of risk you are willing to assume and which you want to mitigate.

18. Total Return In selecting investments based upon their expected total return, you should understand which portion is generated from income and which from growth. Usually, the greater the reliance on income, the lower the market risk but the greater the long-term purchasing power (or inflationary) risk.

19. Liquidity A "liquid" investment is one that can be readily turned into cash if you need the funds on short notice. Investments can vary greatly in their degrees of liquidity. Money Market Funds and savings accounts are very liquid; so are investments with short maturity dates such as Certificates of Deposits (CDs).

20. Time Horizon Different investors have different time frames in which to achieve their investment objectives. Generally, young investors with long time horizons should be able to assume greater risks because they have more time to offset any losses with the higher return potential of investments with greater risk. Older investors, however, often choose to reduce risk because they have less time to recoup losses.

21. Diversification Building a diversified portfolio, with securities spread across different investment classes, can help you avoid the risk of having all your eggs in one basket. By mixing industries and types of assets, you spread your risk. A particular market condition will have less impact if your portfolio consists of a wide assortment of securities than if you purchase only one type of security.

22. Tax Consequences Building a diversified portfolio, with securities spread across different investment classes, can help you avoid the risk of having all your eggs in one basket. By mixing industries and types of assets, you spread your risk. A particular market condition will have less impact if your portfolio consists of a wide assortment of securities than if you purchase only one type of security.

23. Dollar Cost Averaging Dollar cost averaging, the practice of committing a fixed amount of money to an investment program on a regular basis, is a popular practice with many long- term investors. By investing a set amount regularly (usually monthly or quarterly), investors are able to avoid the pitfalls of trying to time market peaks and valleys. Also, because the dollar amount of the investments is set, investors who practice dollar cost averaging are able to buy more shares of a stock or mutual fund when they are less costly and fewer shares when they are more expensive.

24. Value of Time The design of your portfolio should take advantage of time and conform to your personal objectives and risk tolerance.

25. High - Yield “Junk” Bonds Common Stocks Preferred Stocks Mortgaged-Backed Securities Corporate Bonds Municipal Bonds Government Securities Certificates of Deposits Treasury Bills Money Market Funds Passbook Accounts THE RISK PYRAMID

26. Investor Profile Speaks to the risk/return preferences of investors. The basic profiles are: Conservative Moderate Aggressive

27. Asset Allocation the proportion of certain types of basic investments in your portfolio -- is an important component in a total portfolio approach to investing Developing an asset allocation strategy can help you capitalize on the unique risk and return features of different basic investment types, or asset classes, and reduce the volatility of your portfolio.

28. ASSET ALLOCATION - YOUNG INVESTOR

29. ASSET ALLOCATION - MIDLIFE INVESTOR

30. ASSET ALLOCATION - PRE-RETIRED INVESTOR

31. ASSET ALLOCATION -RETIRED INVESTOR

32. ASSET ALLOCATION - CONSERVATIVE INVESTOR

33. ASSET ALLOCATION -MODERATE INVESTOR

34. ASSET ALLOCATION -AGGRESSIVE INVESTOR

35. THE INVESTMENT PROCESS Establish your goals. Line up the Money Assess your risk appetite. Allocate the money according to the goals. Decide on your asset allocation. Find a financial advisor/mentor. Improve your financial intelligence.

36. Sources of Investment Information Friends & Family The Street Financial Newspapers Edward Gayle & Company