ABC Investing By Shobha Narasimha ABC Investing http://simulator.investopedia.com/

ABC Investing By Shobha Narasimha ABC Investing http://simulator.investopedia.com/

ABC Investing By Shobha Narasimha ABC Investing http://simulator.investopedia.com/ What is Investing? Why to invest? What is the catch..?

Risk Risk Of losing money Largest US stock Market Decline 0% 7 6 1 4 7 2 9 2

3 -10% 32 7 4 0 9 2 0 1 0 0 9 9

8 9 9 9 9 0 0 9 1 1 1 1 1

1 1 1 2 2 -20%6 0 9 3 6 0 8 7

1 7 3 0 9 1 0 1 0 0 9 9 9

8 9 9 9 9 0 0 2 -30% 1 1 1 1

1 1 1 2 2 9 1 -40% -50% -60% -70% -80% -90%

-100% Series 1 Things to Consider Time Horizon Risk Rate of return Risk Liquidity Risk Why not keep money under bed?

Inflation Inflation Type of Investment Bank Checking Saving CD Interest taxable, penalty for early withdrawal Bonds Short Term < 3 year Intermediate Term Long Term - 3 10 years > 10 years Bonds Treasury bonds state tax free, federal tax, $1000 multiples, can be traded Treasury bills < 1 year Treasury notes - 1 10 years Treasury bonds > 10 years Bonds Saving Bonds Non transferable TIPS - Inflation adjusted, 5 10 years Municipal bond federal tax free and tax free for state residents Saving Bonds

Can be bought directly at treasuarydirect.gov Low minimum 25,50,75, 100,200,500 Non transferable EE bonds and I bonds (Inflation adjusted) Might be tax free if it is used for higher education Bonds Corporate Bond AZ alphabet soup Mortgage Bond

Mutual Fund Mutual Fund - Bond, Stock, Money Market Expense ratio No load fee Diversification Vanguard, TRow Price Where to Buy ? Discount brokers Scottrade.com Etrade.com www.schwab.com

Portfolio and Asset Allocation Stock Portfolio Treasury Bills 8.00% 10.00% 5.00% 20.00%

Treasury bonds and notes 30.00% international fund 10.00% 10.00% 7.00% Gold REIT Mutual fund - bond Mutual fund - large value

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