Category Archives: Chapter 1: Introduction To Investing

Chapter 1: Introduction To Investing
Whether you have $1,000 or $1,000,000 in savings, education is the key to empowering yourself to take charge of your financial future.

In this course you will learn about the different broad investment choices you have available. Specifically, you will learn how the stock market works, how to evaluate stocks, bonds and options and how to build and manage a well balanced portfolio of investments.

Before we jump in, please understand that this course is not about getting rich quickly; this course is about getting rich slowly.

The 3 steps to growing rich through a lifetime of savings and prudent investing decisions are:

Getting a basic investing education which is why you enrolled in this course
Practice investing with a virtual portfolio
A personalized investment plan and a patient, disciplined approach to implement your plan

So, please resist any offers from “investment gurus” who promise to make you a million dollars in the next year. With this Investing 101 Course, you will understand how money and wealth are generated from investing over time and by balancing risk with potential returns.

By the end of the course, you will have a strong understanding and have built a solid foundation for investing your hard earned money and taking control of your financial future.

Never again will you be dependent on an investment advisor, investment institution or a family member to make investing decisions for you. And in this economic climate, why would you ever want to?

1-04 Stocks

Stocks are “equity investments” which means that when you own shares of a company you own part of that company. For example, if you own 1,000 shares of Apple Computer stock and Apple has 1,000,000 shares that are “issued and outstanding,” then you own 0.1% of the company. If Apple were then to be sold Read More…

1-05 Mutual Funds

A mutual fund is a type of investment where a money manager takes your cash and invests it as he sees fit, usually following some rough guidelines. For example, the Fidelity Group has a fund that specializes in finding high dividend paying stocksStocks are “equity investments”, which means that individuals that own stock shares of Read More…

1-06 ETFs (Exchange-Traded Funds)

ETFs are a cross between mutual funds and stocks. ETFs are simply a portfolio of stocks or bondsA debt obligation of a company, the U.S. Treasury Department, or a city where the borrower receives funds (usually in increments of $1,000), makes semi-annual interest payments based on the coupon rate, and eventually repays the borrowed amount Read More…

1-07 Bonds

Unlike stocksStocks are “equity investments” which means that individuals that own stock shares of a company actually own part of that company., which are equity instruments, bondsA debt obligation of a company, the U.S. Treasury Department, or a city where the borrower receives funds (usually in increments of $1,000), makes semi-annual interest payments based on Read More…

1-08 Gold and Other Precious Metals

Precious metals, particularly gold and silver, are attractive investments to many people. But as usual, you must learn to become a knowledgeable investor as precious metals can fluctuate in value as rapidly as common stocksStocks are “equity investments”, which means that individuals who own stock shares of a company actually own part of that company. Read More…

1-09 Foreign Currency and Foreign Stocks

Investing in FX (foreign exchange), currency speculation, and hedging are variations of the same basic investment strategy—you are betting that one currency will strengthen or weaken against the other. Not for the faint-hearted, these investments involve more due diligence and savvy than all of the other security types we have covered so far. Trading in Read More…

1-10 Real Estate

Buying and selling real estate as an investment strategy is quite different from simply buying a home or commercial building. Just as important in determining FMV (fair market value) as comparable properties are when buying a home, the income stream generated by a property is a primary component for an investor. You typically have three Read More…

1-12 Understand Risk and Investing

Regardless of your choice of investment types, you should learn about and understand the correlation of risk to the size and type of your investments. First, become familiar with the traditional risk levels of various types of asset groups ( stocksStocks are “equity investments” which means that individuals that own stock shares of a company Read More…

1-13 Resources

Bond (Corporate, Treasury, or Municipal): A debt obligation of a company, the U.S. Treasury Department, or a city where the borrower receives funds (usually in increments of $1,000), makes semi-annual interest payments based on the coupon rate, and eventually repays the borrowed amount ($1,000) to the lender at the maturity date of the bond. Certificates Read More…