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Paisley
@pai291
3 base components of the market
- Productivity Growth: Equivalent to technology getting better, faster and us constantly learning from our mistakes. We will always be able to do more with less time and resources than we were able to in the past.
- The Short-Term Debt Cycle is defined by a growth period and then a recession period. These cycles last about 5 – 8 years and peaks when loans become more expensive.
- Long-Term Debt Cycle is similar to the short-term debt cycle and takes typically 50 years to play out. It peaks when the economy is saturated with debt and it literally can not take on any more.
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Trinity
@trinity_493
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Investment explained
An investment is a gamble: instead of the security of guaranteed returns, you're taking a risk with your money.
You can invest in Shares, Bonds, Funds, Government bonds (gilts), ...
How stock markets work
- A stock market is simply a place where buyers and sellers meet to sell shares.
- A share is a divided-up unit of the value of a company.
- Shares exist to boost profits of firms to turn a business into a financial success.
- Enter a stock market: in return for your cash, a business offers you a share in its future – so you essentially own a tiny slice of that company and become a 'shareholder'.
- This slice of the company you own can then be traded with anyone who wants to buy it.
Share price of a company can rise and fall
- The price is initially set by the firm offering shares.
- Its price on any given day can be determined by poor financial results, the economic health and so-called 'sentiment', ie, if City buyers think a firm will struggle, its price can fall.
- Shares are listed on an 'index'.
Lucy
@lucy_d72
Best Investing Strategies | Millennial Money
Common investment questions
Two of the most common investment questions are "what do you invest in " and "what are the best investing strategies"?
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Shady investment advice
Bad investing advice can come from many quarters, such as wealth expos or financial advisors. If anyone promises you any type of return over 12%, 99% of the time, they are probably playing you.
There are great financial advisors out there, but many people who sell investment products just want your money. However, it's not that hard to invest for yourself.
How to avoid bad investment advice
- Never buy a financial or investing product from someone you just met.
- Getting returns over 12% per year is ridiculously hard. If it sounds too good to be true, it is.
- If you don't understand it, don't invest in it.
- If one of your friends recommends an investment that's making them a lot of money, they are probably suckers too. If you see the "results not typical" on any marketing materials, move on.
- There are no "secrets of the super-wealthy" that anyone will sell you for $500 or that you can take advantage of unless you have hundreds of thousands of dollars.
Lola F.
@lolaf237
Investing for Beginners
Investing defined
Investing is about laying out cash or assets now, in the hope of more cash or assets returning to you tomorrow, or next year, or next decade.
Most of the time, this is best achieved th...
Productive assets explained
- Productive assets are investments that internally throw off surplus money from some sort of activity.
- Each type of productive asset has its own pros and cons, unique quirks, legal traditions, tax rules, and other relevant details.
- The three most common kinds of investments from productive assets are stocks, bonds, and real estate.
Investing in Stocks
- It means investing in common stock, which is another way to describe business ownership or business equity.
- When you own equity (the value of the shares issued by a company) in a business, you are entitled to a share of the profit or losses generated by that company's operating activity.
- Equities are the most rewarding asset class for investors seeking to build wealth over time without using large amounts of leverage.
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