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Lesson 22 Chapter 14 FIN 403 Principles of Investments. Homework Assignment. Break your large group into two smaller groups of approximately 5. Discuss your investing objectives, select a mutual fund and discuss how this fund will meet those objectives. Establishing Investment Goals.
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Break your large group into two smaller groups of approximately 5.
Discuss your investing objectives, select a mutual fund and discuss how this fund will meet those objectives.
Financial goals should be specific and measurable. To develop your goals ask yourself..
Review: What is the acronym SMART
(specific, measurable, attainable, realistic, timely)
What is meant by spreading your investments out by percentage?
Stock or equity financing.
If you are a stockholder, how do you get your profit, and if you want your equity capital investment to use for another purpose, how do you get it?
What is the difference between the way that you get your profit from a stock and from a bond?
How do you match your personal investing needs with a fund’s objectives?
Question. Why is location important?
In class exercise. Discuss this question with people sitting near you and write your answer down. Be prepared to tell the class your answer.
You have money to invest and believe that investing in real estate is a good idea.
Answer these questions.
Blue chip stock.
Why do earnings have so much to do with the value/price of a stock?
Efficient market theory.
For example, it went from $100 to $2 which is 98% down, but then it climbed to 4 which is a 100% increase.
What statistics could be used to analyze this?
Homework Question. Research the S&P 500 and tell explain to the class, what it is.
Value of the fund’s portfolio – Liabilities
Number of shares outstanding
For most mutual funds, NAV is calculated at the close of trading each day.
Contingent deferred sales load (back-end load) (Class B shares).
12b-1 fees (Class C shares).
Who is making the money here?
*Source: Year 2000 data from the U.S. Bureau of the Census, Statistical Abstract of the United States, 2001, page 744.
Discussion: what are the advantages and disadvantages of some of these investment strategies?
Mutual fund prospectus tells the funds objective and:
Mutual fund annual report.
There are several ways you can get a return on your investment.