AHRM 2304 Lecture Notes - Lecture 15: Liquidity Risk, Stock Market, Time Horizon
11 Apr 2017
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The most common ways that people invest are by putting money into assets called securities. Stocks are shares of ownership in a corporation and bonds represent loans to companies and governments. Bonds- lend money to the government or a corporation (lending investment) Portfolio is a collection of investments assembled to meet your investment goals. When you"re younger, you have more of an opportunity to invest in risky investments (like stocks), when you"re older you invest in less risky investments (such as bonds) From stocks; paid out quarterly, can be automatically reinvested (drip) Ex// kick-starter campaigns, selling something, getting a second job. Note: bonds are more of a conservative investment. Losing money, market (systematic) risk, random (unsystematic) risk, etc. Arises out of the possibility that any one investment may go up or down. Diversification is the key to reducing random risk. Arises out of the possibility that an entire market might do well (or poorly)
