Investment Planning Outline

  1. Fundamentals of Investment Planning
    1. What is Investing?
    2. Why Invest?
    3. How Do We Invest?
    4. What Process Do We Use to Invest?
    5. Where Do We Go for Financial Planning Help?
    6. What Common Mistakes Do We Make in Financial Planning?

  2. Understanding Risk
    1. Definitions
      1. Risk Avoidance
      2. Risk Transfer
      3. The Risk Averse Investor
      4. Influence of Time on Risk
    2. Types of Investment Risk
      1. Systematic vs. Unsystematic Risk
      2. Market
      3. Interest Rate
      4. Purchasing Power
      5. Regulation
      6. Business Risk
      7. Reinvestment Risk
      8. International Risk
      9. Liquidity Risk
    3. Measurement of Risk
      1. Volatility
      2. Standard Deviation
      3. Beta

  3. Important Investment Concepts
    1. Capital Markets
      1. Importance of Capital Markets
      2. Primary Markets
      3. Secondary Markets
      4. Auction Markets
      5. Negotiated Markets
      6. Third and Fourth Markets
    2. Developing Reasonable Expectations
    3. Evaluating Personal Tax Situations
    4. Qualified vs. Taxable Monies
    5. Assessing Your Level of Knowledge and Experience
    6. Preferences and Risk Tolerance
    7. Understanding Probability Distributions
    8. Trading vs. Investing
    9. Inverse Relationship Between Interest Rates & Bond Prices

  4. Investment Vehicles
    1. Debt Investments
      1. Certificates of Deposit and Cash Equivalents
      2. Characteristics of Bonds
      3. U.S. Government and Agency Securities
      4. Municipal Bonds
      5. Corporate Bonds
      6. Foreign Bonds
      7. Convertible Bonds
      8. Asset-backed Securities
    2. Equity Investments
      1. Common Stock
        1. Characteristics of Common Stock
        2. Capitalization
        3. Industry or Sector
        4. Domestic and Foreign
        5. Initial and Secondary Offerings
      2. Preferred Stock
      3. Private Placements
      4. Derivatives
        1. Options
        2. Futures
      5. Real Estate
      6. Tangibles, precious metals, collectibles, etc.
    3. Insurance-based Investments and Investment Companies
      1. Annuities
        1. Characteristics
        2. Fixed
        3. Variable
      2. Investment Company Characteristics
      3. Unit Investment Trusts
      4. Open-end and Closed-end Investment Companies
        1. Closed-end
        2. Open-end
    4. Valuation Methods
      1. Bond Rating Services
      2. Common Valuation Methods
        1. Present Value Analysis
        2. Intrinsic Value
        3. Price/Earnings Analysis
        4. Alternative Valuation Techniques
      3. Fundamental versus Technical Analysis

  5. Measuring Investment Returns
    1. Individual Security Measures of Return
      1. Components of Return and Yield to Maturity
      2. Yield to Call
      3. Compounding vs. Discounting
      4. After Tax Yield
      5. Annualized Return
      6. Real (inflation adjusted) Return
      7. Total Return
      8. Holding Period Return
    2. Portfolio Performance Measurement
      1. Benchmark Portfolios
      2. Risk-Adjusted Returns
      3. Time vs. Dollar-weighted Return

  6. Investment Theory and Strategies
    1. Passive vs. Active Strategy
      1. Passive
      2. Active
    2. Building an Investment Portfolio
      1. Asset Allocation
      2. Asset Classes
      3. Diversification
    3. Risk Reduction in the Stock Portion of a Portfolio
      1. Law of Large Numbers
      2. Modern Portfolio Theory
      3. Dollar Cost Averaging
      4. Dividend Reinvestment
    4. Advanced Strategies
      1. Use of Leverage
        1. History of Margin
        2. How Margin Works
      2. Option Strategies
        1. Definitions
        2. Option Basics
        3. Strategy Examples
        4. Covered Call Writing
      3. Short Sales
Mini-Quiz on Bonds