Investing Video Playlist Notes

Investments 101

  • US Government Bonds are considered risk-free because the U.S. government can print money to meet debt obligations.
  • Government bonds were better investments in the 1980s due to significantly higher interest rates.
  • Corporate bonds are issued by companies with higher yields but greater default risk, while municipal bonds are issued by state/local governments for public projects, often tax-free.
  • Stocks are referred to as "the market", with typical returns historically at 7-10%.
  • Suggested asset allocation: Stocks 60%, Bonds 30%, Alternatives 10%.

What the Heck is the DOW?

  • General Electric is the only company that has been a part of the Dow-Jones Industrial Average since its establishment.
  • The DOW includes 30 companies today.
  • Investors follow the DOW, even though it represents a small percentage of companies, because it reflects overall market sentiment.
  • What's actually happening is more important than what people think is happening when following stocks.
  • Investors shouldn't stress and not check the DOW too often.

What the Heck is a Mutual Fund?

  • Mutual funds are described as "investment stew" because they are a diversified mix of various investments.
  • Benefits of investing in mutual funds include diversification and risk reduction.
  • Actively managed funds are typically more expensive than passively managed funds.
  • 401(k)s are similar to mutual funds as they invest in a diversified portfolio of assets.

How Risky is the Stock Market?

  • A stock is a share representing ownership in a company.
  • Stocks from smaller companies are riskier than those from larger companies.
  • Suggestions to protect investments: diversify your portfolio and focus on long-term investing.
  • Avoid checking your stock portfolio too often to prevent emotional decision-making.

Is Retirement Even Possible?

  • AARP suggests saving 1.181.18 Million for retirement.
  • 28% of people over 55 have nothing saved for retirement.
  • Three ingredients for a solid retirement: good markets, time, and compound interest.
  • "Two Cents" recommends getting financial advice from a sworn fiduciary (someone who is sworn to solely help others and not be a detriment towards your financial life).