50 Key Concepts for Investing

Description

Guaranteed pensions from an employer are a thing of the past. Today, individuals have to make their own investment decisions. Yet, most people feel ill-equipped to make decisions on their own and to follow the markets. Do you know how much you need to retire or how to put together a portfolio or what the different indexes represent or how to value a stock? What does it mean to sell short or buy on margin? What issues should you think about when investing in mutual funds? What common behaviors hurt investors’ returns? If you are not satisfied relying on others to determine your financial future, this program is for you. It has been designed to give you an understanding of practical investment knowledge which is necessary to make rational investment decisions

Topics

Retirement Funds

• Calculate how much you need to retire
• Calculate how much you need to invest each year to reach your goal
• Learn to make reasonable assumptions concerning investment returns
• Discover the relationship between risk and return
• Consider the greatest risks to your financial well-being
• Understand the four steps to the portfolio management process
• Understand how dollar cost averaging can help some investors realize the risks of market timing
• Discover how stock investments are taxed and why active trading is costly
• Learn the difference between brokers, financial planners, and money managers

Passive or Active Investor

• Learn the difference between active management and passive management (indexing)
• Understand the benefits of indexing
• Realize that indexing has some hidden costs
• Determine the importance of indexes and why you must understand them
• Learn the different methodologies used to calculate indexes
• Consider better ways to “index” your money
• Distinguish between growth and value investing
• Discover how indexes distinguish between value and growth
• Learn what ETFs are
• Identify the advantages and disadvantages of ETFs
• Learn how to use ETFs to follow the market
• Watch ETFs to spot sector rotation

Stocks Worth Investing

• Understand the theory behind screening for stocks
• Learn the basic screening themes
• Discover other ways to identify stocks to research

Technical Analysis

• Distinguish between technical analysis and fundamental analysis
• Understand the assumptions of technical analysis
• Realize the advantages of technical analysis
• Recognize the disadvantages (problems) with technical analysis
• Discover how investors look at charts to identify trends
• Learn the theory behind flow of funds indicators
• Learn the theory behind sentiment indicators
• Study market structure indicators

Stock Valuation

• Learn how to do a quick two-minute valuation
• Understand that equity has a cost
• Study the importance of return on capital
• Understand the importance of growth
• Identify the limits on how fast companies can grow
• Calculate how much of a firm's value comes from growth
• Distinguish how much value the market places on a firm's growth
• Identify the market's expectations for a stock
• Learn the importance of earnings
• Distinguish between the NYSE and NASDAQ

Price Floors and Ceilings

• Discover why stock prices have floors but not ceilings
• Calculate an "LBO" price floor

Multiples

• Understand the idea behind using multiples
• Identify the advantages of multiples
• Recognize the disadvantage of multiples
• Learn the four steps in using multiples

The Fed Model

• Determine what "the Fed Model" is
• Understand the problems with this model and how it is misused
• Learn what the Fed Model actually describes

Behavioral Finance

• Learn how investors should make decisions
• Understand common (mis)behaviors of investors
• Discover mistakes that investors make with 401(k) plans

The Economy

• Understand the relationship between the economy and stocks
• Identify the problem with studying the economy to forecast the market
• Learn how to watch for economic growth
• Discover why inflation matters
• Understand the components of GDP
• Track the economy:
  • Watch for extremes
  • Watch the order of events
  • Watch for changes in expectations or trends
  • Watch for disasters
• Use leading, coincident and lagging indicators
• Monitor the yield curve
• Understand what the market is expecting the Fed to do next

Markets

• Learn how to use:
  • Market orders
  • Limit orders
  • Stop orders
  • Other orders
• Discover how to buy on margin
• Understand the risks and benefits from margin
• Determine when you will receive a margin call
• Understand what it means to sell short
• Identify the key attributes that short sellers look for
• Learn the idea of risk-neutral investing
• Question short sellers: good or evil

Mutual Funds

• Understand the relationship between the economy and stocks
• Distinguish between segregated accounts and mutual funds
• Distinguish between closed-end funds and open-end funds
• Learn how investors trade closed-end funds
• Discover the advantages and disadvantage of closed-end funds
• Determine the types of open-end funds
• Understand the explicit costs of mutual funds
• Recognize the hidden costs of mutual funds
• Clarify the mutual fund class structure
• Understand the taxation of mutual funds
• Understand the recent mutual fund scandal
• Distinguish a mutual fund from a hedge fund
• Identify the advantages of a hedge fund
• Recognize the disadvantages of a hedge fund

Final Assorted Topics

• Discover the advantages and disadvantages of sell-side research
• Understand the risks of investing in IPOs
• Recognize the fluff in company press releases
• Identify the signs of fraud with brokers
• Discuss current issues in the market

Key Benefits

There are 13 Key takeaways from this program.  When you leave, you should understand:

• How much you need to retire
• Whether you want to actively or passively manage your investments
• How to come up with ideas for stocks to research
• How to value a stock
• How to use multiples (and understand the risks)
• "The Fed model" and why you should not rely on it to buy stocks
• How to calculate "price floors" that should provide good stock buying opportunities
• Why investors use technical analysis and what this type of analysis does for us
• Common behavioral mistakes which investors make (and also mistakes that investors make in their 401(k) accounts)
• Key reasons stock investors follow the economy and the best (and quickest) methods to do this
• How to place stock orders, as well as how to sell stock short
• The advantages, disadvantages, and costs of mutual funds
• Signs of fraud when dealing with brokers.

Continuing Education Units

Participants earn 1.40 continuing education units (CEUs) or 14 CPE’s . A certificate of completion will be presented from Texas Executive Education.