Investment Basics (stocks) Flashcards
Risk Averse describes an investor who
Is reluctant to take risks
(in the context of investment, risk refers to the volatility of a portfolio)
Top Down or Bottom up?
A strategy that first evaluates the prospectives of nations and industries
Top Down
Top Down or Bottom Up
A strategy that first evaluates company financials and stock price momentum
Bottom up
If the objective is capital appreciation, is a growth or value strategy more appropriate?
Growth
(invest in companies with high potential for market expansion, commonly high p/e companies)
An income investing strategy seeks to…
Generate a passive income through dividends
Top down or Bottom up?
Stock price technical analysis
Bottom Up
Top down or Bottom up?
Macroeconomic technical analysis
Top down
True or False?
Capital Preservation strategies would likely invest in a greater portion of stocks to bonds
False
(bonds offer much more capital preservation, so a conservative strategy may invest in 10-30% stocks)
Active strategies are a low-cost and tax efficient method for managing portfolios
False
(Passive strategies are low cost and tax efficient)
