The two lowest scores for chapter 12 and 13 are, ‘’Describe the characteristics and
classifications of bonds.’’ being 12 and ‘’Identify the advantages and disadvantages of direct
and indirect real estate investments.’’ These two are important to learning about my personal
finance because they are a part of investing in stocks, bonds, real estate and mutual bonds.
I would choose mutual funds to invest my retirement savings. There are many benefits to
mutual funds. I generally like the idea of low risk and getting a moderate reward. Retirement
is just something I think everyone should need to be very confident in and be certain of.
The annualized return on different stocks is the best way to compare. The annualizing
method does a better job at comparing stocks to other alternatives that could have been
invested in during that same time. Also taking a look at the average long rate of return,
which should be between ten percent and twelve percent. This can be looked at using the
annual stock return.The advantages of investing in a mutual funds are it can reinvest itself,
as known as dividend reinvestment, it normally has a lower risk than other options, and the
price to invest normally less which makes the risk less. Investing stocks and bonds are
harder for me to understand. I really tried to look at and learn this week about different types
of bonds and other investments. We currently invest in our 401k roth account. We have
contributed enough that it has help us do things like buy our house and save when my
husband got injured on the job. We are currently at the level of aggressive investing. I think
that is where we until we get closer to retirement age. I tried to do better in this class than I
did the last with my husband being out of work I am trying to keep up with the class load
but with the added work load to make up the money loss. I am glad I got to take this class I
learned a lot about investing and money management. I would choose mutual funds to invest
my retirement savings. As I stated in my answer for the question above, there are many
benefits to mutual funds. I personally like the idea of low risk and getting a moderate
reward. To me, retirement is just something I would need to be very confident in and be
certain of.I think looking at the annualized return on different stocks is the best way to
compare. The annualizing method does a better job at comparing stocks to other alternatives
that could have been invested in during that same time. As well as taking a look at the
average long rate of return, which should be between ten percent and twelve percent. This
can be looked at using the annual stock return. The area that I did the poorest in this week
was describing the characteristics and classifications of bonds. This is definitely not an area
that I have a lot of practice or have studied a lot about. Overall, investing in general and
broad areas is not my strongest expertise. I have said before that I want to be better informed
when it comes to my investment options, but this is also an area that gives me some stress
when thinking about it because it is potentially money that I would be ok losing if an
investment goes bad. As of right now, my only investment into my future and retirement is
just whatever my 401K is set up for. However, to be honest, I don't even know how my
401K works outside of me putting money in every pay period and my employer matching
those contributions up to a certain amount. This is another area that I need to start asking
more questions about and paying more attention to. I would be most likely to invest in open-
end funds as "it is required to buy back shares any time an investor wants to sell, and it
continuously offers new shares for sale to the public." This option seems like the "safest"
option of all of them. If there comes a time where I want to sell, I want to know for sure that
that will be an option for me and If I decide that I want to invest more, that that option is
also there for me. For my savings, I would almost always choose to diversify my savings
into mutual funds and stocks. This is due to the market security afforded to mutual funds,
and the growth potential of stocks to outweigh the market inflation.
As mentioned above, mutual funds have a fair amount of market security. Assets in a mutual
fund are easily liquidated, and diversified into multiple areas for added protection.
Additionally, mutual funds generally have an independent manager, who's purpose is to keep
the majority of the investors able to stay hands-free on their investment. This individual is
generally someone with market knowledge and who utilizes analytics to generate more
favorable returns on investment.
When evaluating stocks, one of the most important aspects to successful investing is to
recognize risk. Certain stocks are very high risk, but on the off chance that they succeed can
generate immense returns. Notable stocks in this category include penny stocks, tech
startups, and drug startups. On the opposite end of the spectrum rest blue-chip stocks.
Established companies who's existence is not in question. Notable examples of blue-chip
stock include Proctor and Gamble, Johnson & Johnson, Microsoft. These companies stock
tends to be more protected from industry collapse, and they tend to hold true to the ten and a
half percent market value increase annually. From what I've read so far I think for now I
would choose stocks because it almost seems like a sure route, ALMOST. I say almost
because if value declines some or all investment can be lost. In week 4 I scored an 11 for
how risk averse are you, pegging me a conservative investor so I think stocks fits that mold
depending how I invest of course. I am still learning more about the difference in all 3 but I
believe for now my answer would be stocks.Mutual funds tend to be the most popular
investment choice in the USA.Advantages for investors include advanced portfolio
management, dividend reinvestment, risk reduction, and fair pricing, mutual funds also over
a wide variety of investments then an individual investor could. mutual funds also offer an
air of simplicity by getting started with one mutual fund. Once you know your investment
objective, which will include the number of years to invest and how much risk you're willing
to take, you can choose the best mutual fund or funds for you. And depending upon the
types of mutual funds you use the ongoing maintenance required may be little to nothing.
The advantages of investing in a mutual fund are diversification, management, reinvesting,
liquidity, and withdrawal options. Mutual funds allow for a collective pool of individuals
through portfolios to increase the market's odds with a variety of shares. In addition, this
option is usually hands-free and managed by portfolio managers. The ease of withdrawal
also has various options. For instance, you may cash out and receive funds monthly or lump
sum and even borrow from your investment account. Lastly, you may transfer the capital
gains to another portfolio with a different company if you wish without little to any
penalties.The two companies listed in the 12.1 demonstration were Walmart and IBM. Given
both of these companies were calculated with the holding period of return and annualized
rate of return. Walmart turned out to be better than IBM in both of these calculations.
Walmart was also the better option due to the price of the shares. In the beginning, Walmart
is $37 and IBM being $68 in 2009. I would also be able to have more purchasing power of
the Walmart stock to maximize my gains.Out of all the various types of investment
companies that offer mutual funds, open-ended types interest me the most. Most of these
types of companies are well known and reliable, and usually safer. Another interesting fact
is most companies you work for offer use these types to interest you in their portfolios. With
this being said, companies that offer this usually offer a match to your investment at a
percentage. I scored the lowest in 13.2 Mutual Fund Investing when taking my Build Your
Proficiency Diagnostic. I struggled to identify the advantages and disadvantages of investing
in a mutual fund. More specifically, I had a hard time comprehending the costs of investing
in a mutual fund, such as the shareholder fees and the fund expenses. Two of the many
advantages when investing in a mutual fund are 1)the investment is managed professionally
and 2)the liquidity of the investment. If you choose to partner with a larger company, they
have staff who work solely on investing money. Although this is no guarantee that your
money is safe, the likelihood that these people know what they are doing is more significant
than you, yourself handling the investment. When you first begin with a mutual fund, you
review your withdrawal options; that way; you can turn your assets into cash. a
If I were to invest my retirement savings, I would choose to do so in U.S. Treasury Bonds.
The two main points that grab my attention are that with a U.S. Treasury Bond, the interest
payments are a fixed amount for the bond's life and lower risk investment. I appreciate how
convenient you can to make the maturity dates on a U.S. Treasury Bond to match your
significant milestones throughout life. With this specific bond, interest paid on it is federally
taxable but is excluded from state and local income taxes. A personal experience that sways
me in this direction is my Great Aunt Jean( born in 1913 and passed away in 2018). She
bought and cashed out U.S. Treasury bonds at their maturity throughout her entire life and
retired at 58. One concept I have learned from chapters 12 and 13 is that I know nothing
when it comes to investing in stocks, real estate, bonds or mutual funds, which is why I
scored so low for both chapters. This concept might be important to my personal finances
because If I know nothing about investing in real estate It would be hard for me to have the
knowledge of what to do, how to do it in addition to making the wrong steps because I do
not know how to go about things since I never learned. I would definitely want to know
more about investing real estate, as my mother had mentioned that she wanted me to
purchase a house from my grandmothers neighborhood as it is something in my name as
well as the property rate going up as time goes on.A few advantages of investing into mutual
funds would be being able to save for retirement plus emergencies, while over the years the
number for investing into mutual funds has grown for those specific reasons.How I would
choose to invest my retirement savings, would be investing into stocks. Although a hard
thought would be mutual funds, as it seems to be less stressful, you are kind of knowing
what you are going to get, as it states that it is a fair price and can advance my portfolio.
Stocks give me more interest, as it is more of a not knowing deal, I am taking more of a risk
into a company that is either bigger or smaller and it can lead to growth or can crash
completely, and to be quite frank, I am okay with that. It gives the unknown but also if you
understand what you are doing, knowing what to sell and what to hold, investing into stocks
can be interesting, mysterious, fun and something that is worth your knowledge. This is not
surprising as I have very limited knowledge of this chapter as a whole. It is very important
for me to have a firm understanding of these chapters and to also expand my knowledge
passed this text book as I plan to utilize the stock market to increase my retirement
earnings.From an investor's view point, mutual funds have a number of advantages such as a
professional money management where the decision making of stock selection is removed
from the investor's responsibility. Another reason is liquidity. Whether you have an open or
close-end fund you can sell your funds for a cash return. One more advantage is the ability
to automatically participate in dividend reinvestment.Hands down the annualized method of
calculating the return rate of an investment is the better formula. The reason being is that it
broadens your view for options of investing in more lucrative companies based on the return
rate. In chapter 12 I scored lowest on "describe the characteristics and classifications of
bonds" and in chapter 13, "identify the advantages and disadvantages of direct and indirect
real estate investments". I can honestly say that this is one thing growing up that wasn't a
talked about topic. No one in my family ever made it known whether or not that had or even
new about bonds and real estate investing. Being a property owner and working in the
commercial retail home improvement industry, real estate investing has intrigued me. I have
heard horror stories and testimonials as to why its the best type of investment. I want to
know more also because I may decide to turn my current home into a rental property. It
seems like a good way to have residual income over a long span of time. Having a few also
may contribute to our retirement plans/fund as well. I want to know as much as possible
when deciding to either sell or convert to a rental. Also, bonds seem to be the way to go if
there is time on your side. I want to buy my kids some bonds that at maturity would provide
financial compensation for school, a car, or even a down payment on a home. I don't know
anyone in the business so I guess I will have to tur to a pro for advice.Currently my 401k
plan is being reinvested in stocks. To be frank, I could use a crash course on exactly where
it is being invested. Whole hertedly, I have only paid attention to my contribution and the
companies contribution. Anything beyond that is a slight mystery. After the readings in this
course, I think that not one of the types of investments would be the best for retirement. I
think that you should be diverse, money allowing, and invest in a few. I personally like the
idea of real estate investing. It involves brass tacks numbers and it is centered around a field
that I am familiar with. I was also told that its never a bad idea to own land/properties. I like
the idea of retiring and using rentals or land subdivision as a source of income or a large
lump some to fund my retirement. “Compare the features of preferred stock with those of
common stocks and bonds” is the topic I did the worst on in the proficiency diagnostic. I
was very surprised by the results, which seems to be normal, at this point. This concept
could be very important to my personal finances if I ever decide to invest money. I need to
understand the difference between preferred stock and common stocks and bonds if I want to
have the best chance of making money and investing in the right things. I will also benefit
from knowing what I am doing and knowing the difference between them, so I know what I
am putting my money towards.
a When it comes to my retirement, I am not the pickiest. Not only do I have an idea of what
I want to do, but I am also open to new ideas. The plan I have for my retirement is to invest
anywhere from twenty-five to fifty percent of my money in the stock market and try to grow
that money while saving some money and also possibly investing in real estate. I would like
to buy some houses and fix them up and resell them to make a profit. I would also like to
buy a few houses to keep and rent out to tenants. Once the payments are done, I will be
making a constant profit and also have more assets.
The advantages of investing in a mutual fund are pretty clear. Not only can you lower
your costs, but you can increase your portfolio and create greater liquidity. Compared to
stocks and bonds they are more reliable and more likely to create a profit, where stocks and
bonds are riskier and have a higher possibility of loss. One concept from chapter 12 and 13
of the Build Your Proficiency Diagnostic is "describe the characteristics and classifications
of bonds (chapter 12)" and "Explain why investment in precious metals, gems, collectibles,
cryptocurrencies, and derivatives are speculative (chapter 13)”. This concept might be
important to personal finances because it is a way to increase your income. I would want to
know more about this because it is great information to keep in mind especially once you
retire. It is also good to be able to pass the information along to your kids, family, friends,
etc.. I would choose to invest my retirement savings in bonds because they are predictable
income and less risky. The advantages of investing in mutual funds is risk reduction and it
has fair pricing. The company that offers mutual funds that most interest me is Fidelity.
They do not require a minimum to invest and I find that very interesting. I am not really sure
who I feel is the best to compare companies when it comes to discussing measures to
evaluate common stocks.
