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51 terms

Business Econ--Dave Ramsey--Investing

Chapter 2 of Dave Ramsey curriculum on investments
STUDY
PLAY
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