Business Econ--Dave Ramsey--Investing

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51 terms · Chapter 2 of Dave Ramsey curriculum on investments

diversification

To spread around and lower risk.

money market account

Best place to keep your emergency fund.

diversification

Lowers your risk with investing.

KISS

Keep it Simple Stupid is this principle

CD

A savings account device with a certificate

real estate

Least liquid of all investments

annuity

A savings account within an insurance company

risk return ratio

When risk goes up, return goes up

share

Piece of ownership in company stock

liquidity

How easily something converts to cash (availability of your money)

up

With MOST investments, as risk goes up, return goes:

100

This percent of the ten-year periods in history of the stock market where the market has made money

mutual fund

This investment form typically includes investments in 90-200 various companies

dividends

Profits that a company distributes to its shareholders

borrowed

Never invest using this type of money:

commodities

Oil and gold are examples of this type of investment:

5-10

When investing, research at least this many years into the history of the investment and know the track record

short

Savings are used for _____-term investments

international growth

Stocks from overseas companies are called _______ mutual funds

bond

A debt instrument where company owes you money

mutual funds

Investments where investors pool their money

high

What degree of risk is an investment in a single stock?

bad

Good or bad investment--gold, commodities, and viaticals

viatical

Investment that povides payment on a life insurance policy before death

aggressive

Young, growing companies generally are _____________ mutual funds

high

High or low risk? Aggressive growth fund

leave it alone and stop investing in it

If you begin losing money in your mutual fund, you should do this:

small-cap

What cap? Aggressive growth funds

mid-cap

What cap? Growth funds

large-cap

What cap? Growth and income funds

CD

Which has the lower rate of return--mutual fund, CD, or bond?

mutual fund

Which has the higher rate of return--mutual fund, CD, or bond?

low

Low or high risk? Annuities

high

Low or high risk? Commodities

less return

Generally, the more liquid an investment is, the:

save

save or invest? Prom is coming up in a few month

invest

save or invest? Plan a retirement fund

save

save or invest? Big anniversary party for your parents next year

save

save or invest? You want to buy a car in two years

invest

save or invest? Start a college fund for your baby

save

save or invest? You want to buy a house in five years

25

With standard mutual fund diversification, what percent is invested into each type of fund?

debt

Before even thinking about investing, you should have already paid off all:

viaticals

Buying the beneficiary position on a life insurance policy of someone who is dying; listed by FTC in top 10 scams

bonds

A debt instrument where the return comes on the interest rate paid on the loan

mutual funds

Portfolio managers who do lots of research manage this pool

real estate

You should never pay retail (asking) price and this requires a lot of cash

single stock

Represents a piece of ownership in a company

bonds

As interest rates rise, these prices fall

Certificate of Deposit

A six month or one year savings instrument that pays a little more interest than a regular savings account

commodities/futures

If oil hits a certain level in 90 days, your money will increase tenfold

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