Artifact:
Curricular Response
- Stock VS Bond
What is the difference between a stock and a bond?
- A stock is a share in a company owning a piece of the company while a bond is a loan given to a company that they pay back to you over time
Which security tends to have the best returns?
- Having stocks in a company is more risky but has higher returns
2. Risk
How are risk and return connected?
- By buying from a risky but highly profitable company will give you a high return, but is risky because the company could go bankrupt at any time.
What are some steps you could take to mitigate risk while investing in the stock market?
- By diversifying your stock portfolio, AKA getting a lot of spread out stocks among smaller companies.
3. Balance
What does it mean to have a “well-balanced portfolio?”
- It shows the proportion of bonds to shares you own, while also showing your diversified portfolio.
What is “rebalancing” a portfolio and why is it important?
- Rebalancing your portfolio is when you either sell stocks or bonds depending on the market, like a market crash where you would buy more stocks than bonds due to how low the market is.
Core Competency Self Assessment
How much information did you use to help you with your decision-making process?
I used however much information we were given to with my decision process. With all the information given to me I can use my mind to invest in what I want and save what I want, while also keeping myself from recklessly buying stuff, mainly liabilities, like cars, new phone, or any other item you buy that depreciates when you buy it
Has investing become a more approachable or attainable concept to you?
For me it has become more approachable but I’m still not too sure about higher risk investments like stocks, because I’d rather put my money towards other things that are more interesting like getting into real estate, which is a lot safer and more trusted. I’m also going to resist from buying liabilities and buying assets, because I can discipline myself to do that and will overwork myself so that I can get a house as fast as possible.
What is something that you have learned which you have changed your mind about?
I changed my mind about investing, beforehand thinking it stupid to invest all your money into something super risky. Now though, I think it would be smart, as long as you balance your portfolio or trust in certain parts of the market. It helps if I keep track of my funds very closely, by doing whatever I can in my spare time to look at the market, seeing what’s low and what’s high. Also investing in my retirement fund would be something I’ve changed my mind about because I thought it would happen naturally to save for retirement but it’s not the case, and I will save for retirement as much as I can.