CDAE 158 Lecture Notes - Lecture 16: Asset Allocation, Mutual Fund, Common Stock
25 Oct 2018
School
Department
Course
Professor
Investment growth
- Growth means investment will increase in value
- Common stock
- Growth companies pay little or no dividends, but reinvest in the company
- Select mutual funds and real estate offer growth potential
Investment liquidity
- Ability to buy or sell an investment quickly without substantially affecting the
investment’s value. Real estate is not a very liquid investment
Asset allocation the process of spreading your assets among several different types of
investments to lessen risk
The time factor the longer you are invested the better your opportunity for increasing
returns
Your age the type of investments should change with your age
Equity capital money that a business obtains from its owners; stockholders buy shares
of a company’s stock
- Stockholders are owners and share in the success of the company
- A corporation is not required to repay the money obtained from the sale of the
stock
Document Summary
Growth means investment will increase in value. Growth companies pay little or no dividends, but reinvest in the company. Select mutual funds and real estate offer growth potential. Ability to buy or sell an investment quickly without substantially affecting the investment"s value. Real estate is not a very liquid investment. Asset allocation the process of spreading your assets among several different types of investments to lessen risk. The time factor the longer you are invested the better your opportunity for increasing returns. Your age the type of investments should change with your age. Equity capital money that a business obtains from its owners; stockholders buy shares of a company"s stock. Stockholders are owners and share in the success of the company. A corporation is not required to repay the money obtained from the sale of the stock. The corporation is under no legal obligation to pay dividends to stockholders; they may instead retain all or part of earnings.
