Fin 320 Investments

Define Investments

The commitment of funds to one or more assets that will be held over some future period in order to produce income and wealth

What is the equation for wealth?

Wealth = Assets - Liabilities

What are some examples of investments?

Stocks, bonds, ETFs, derivatives (financial assets)

Real assets (property, art collection, machines)

Cryptocurrencies

Define liquidity

The relative easiness of transforming an asset into cash without losing the original capital of the asset

By how much has advisory relationships grown from 2015 to 2024?

Grew from approximately $150 bil (2015) to $260 bil (2024)

What percentage was wealth gains in 2022?

37-39% above expectations-sharp change since 2016.

What was the driver of wealth growth in 2022?

The bulker of growth came from real estate. There was an increased value of housing assets. Homeownership rate jumped 7% (53.5-60.5%) for those born in 1980.

How much did homeownership increase for those born in 1990?

It increased by 11%.

Will the financial growth millennials and gen z received in 2022 continue?

No.

1) Inflation and high interest rates

2) Phantom wealth: A large sum of networth is in the form of illiquid assets such as appreciating homes and retirement accounts.

According to Census as of 2020 over _____ of Baby Boomers and _____ of Millenials have _____ savings at all.

40%, 50%, no retirement