PF final (LAST ONE CMON) Flashcards
(45 cards)
What are the 5 steps to the building a solid financial foundation pyramid?
- Building a solid cash flow
- Ensuring proper protection
- Eliminate Debt
- Emergency fund
- Investments
How much money USD do you need to make annually to be in the top 1% globally?
60k
What are the three things that honor the good fortune god has graced upon you?
Invest wisely
Obtain wealth
Help others
Who makes more money? Person A investing 2k from 19-27 or person B investing 2k from 27-65?
Person A by 700k
What is rule 1,2, & 3 of investing?
- Buy all the boats
- Don’t get off the rollercoaster
- Buy the dips
What are some patterns that the stock market has shown in terms of going up or down?
It goes up 70% of the time. It goes up slowly and down very quickly.
What did the Delbar study show?
Delbar study showed that the average investor only made 4% when the s&p made 11%. People who get off the boats for emotional reasons suffer financially.
Who are better investors men or women? What did the Fidelity study say is the best investor?
Women are better investors because they are more patient and trade less. Fidelity study showed dead people are the best
What is the rule of thumb for what investment vehicle to use?
If you are going to use money within 5 years use a high interest savings account. Longer than that put it into the stock market.
What is a stock?
Ownership in a company that entitles you to voting rights. Public companies are traded on an exchange
What makes a stock good to invest in?
Whether their share price is undervalued or overpriced, not about if a company is good or bad.
What are dividends? what type of companies pays dividends?
Large companies limited growth pay out dividends. Dividends are distributions of company’s profits.
Should you reinvest dividends?
Dividends should be automatically reinvested by your account. Reinvesting gives you a bigger % of ownership but not more value
What is Flight to safety?
It’s when the stock market is performing poorly so people move to bonds in a panic. You should sell your bonds and move to stocks if possible
What are the three geographical locations in stocks? Give examples of nations
NorthAmerican (CA, USA)
International (West Europe, Japan)
Emerging markets (China, India)
What is the three-factor model when investing?
- Buy stocks not bonds
- Buy small companies
- Buy value companies
What does Barry suggest investing in?
all three geographical markets, both small mid and large cap, and both value and growth stocks (everything)
What are the rebalancing rules?
Only rebalance max 1 time a year. Rebalance with new money. Buy low (the losers)
Why are ETFs better than mutual funds?
Only one set of fees (MER) and they’re lower. Same amount of diversification. Can be traded at any point in the day. More tax efficient
On average is passive for active investing better?
Passive is better. Not doing anything usually gets in the 21st%
What were the results of the Bessembinder study?
4% of the stock market drove the majority of the wealth. Nearly impossible to pick the winners
What’s the idea of timing the market? is it feasible?
Timing the market is when you try to strategically buy low and sell high. It’s nearly impossible to do and you’re better off just putting your money in as soon as you can.
What purpose to financial advisors have that allow their clients to do better?
Their clients do 1.82% better because the
1. advisors allocate their investments into equities,
2. they have a sound withdrawal strategy,
3. they’re tax efficient,
4. buy good investment products, 5. help clients with goals/needs/timelines.
Are REIT risky?
individual REIT are but not ETFs
