11.30.10 Econ

11.30.10 Econ - 11.30.10 Economics Intro Getting rich the...

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11.30.10 Economics Intro Getting rich the Econ way - save (starting young) - invest - Diversify (index funds) Theory of Financial Marktes - Using Experts vs. Using Darts - Efficient Market Hypothesis - Behavior Economics Stocks, Bonds, Mutual Funds, Index Funds, Present Value Investment mistakes no Econ 201 students should make Wealth : Consumer Durables: limited liquidity. Econ value is in current consumption, not investment (i.e., future consumption). Think appliances, smart phones, cameras Human Capital: limited liquidity. Econ value: consumption and investment. Think education and on-the-job training. Housing: limited liquidity. Econ value: consumption and investment. Think homes and interest rate deduction Other assets: gold, land, art, antiques, etc. Mixed liquidity. Econ value: consumption and/ or investment. Financial Instruments : high liquidity Econ value: investment Commonly take form of: Stocks: usually owned (or “held”0 individually (e.g., 100 shares of Intel), or mutual fund (e.g., 100 shares of fidelity select pharmaceuticals Portfolio), or index fund (e.g., 100 Bonds: usually held individually (e.g., Monsanto Corporate Bond, matures 8/15/12) or in
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11.30.10 Econ - 11.30.10 Economics Intro Getting rich the...

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