Investment Basics

Day 1

1. Introductions

1. Investment Overview
   1. The language of investment basics
   2. Activity: Investment Basics Alphabet Soup
2. Time Value of Money Basics
   1. Pay yourself first
   2. Savings vs. Investing
   3. Time value of money
   4. Compound growth
   5. Present value/future value
   6. Rule of 72
   7. Rate of return/number of years
3. Basics of Investing
   1. Benefits of long-term investing
   2. Investing made easy
   3. 401(k) savings example
   4. Investing fears
   5. Risk/return tradeoffs
   6. Investment characteristics
   7. Sources of return
   8. Fixed vs. variable investments
   9. Understanding and assessing risk
   10. Building blocks of risk/return
   11. Additional areas of risk
4. Measures of Return
   1. Corrections, bear, and bull markets
   2. S&P 500 returns
   3. Activity: Risk Ranking
5. Investment Types or Asset Classes
   1. Overview and Risk & Rewards
   2. Basics of Cash and Cash Equivalents
      1. Safety and stability of principal
      2. Liquid
      3. Stable value/GICs
      4. CDs
   3. Basics of Bond Investing
      1. Bond overview
      2. Characteristics of bonds
      3. Credit quality
      4. Maturity length
      5. Yield curve
      6. Treasury vs. Corporate
      7. Rates in the news
   4. Basics of Stock Investing
      1. Stocks overview
      2. Characteristics of stocks
      3. Market capitalization
         1. Small, mid, large-cap
      4. Investment style
      5. Domestic vs. International
      6. Sectors
      7. Single issue risk
      8. Common stock market indexes
   5. Basics of Mutual Fund Investing
      1. Characteristics of mutual funds
      2. Types of mutual funds
      3. Passive vs. Active
   6. Stock Market Volatility
      1. Short-term sharp drops
      2. Short-term sharp recoveries
      3. Long-term performance

Day 2

6. Behavioral Economics
   1. The psychology of investing
   2. Emotional investing curve
   3. DALBAR study
   4. Reacting can hurt performance
   5. Market timing
   6. Fidelity academic study
   7. Folly of market timing
   8. Diversification in behavioral finance
7. Alternative Investments
   1. Fiduciary implications: DC plans
   2. Types of alternative investments
   3. Fiduciary duty
   4. Characteristics
   5. Fiduciary consideration/implications
   6. Cryptocurrency
8. Sources of Investment Information
   1. What to look for in financial websites for investing information
   2. Learning activity
9. Portfolio Management and Asset Allocation
   1. Investment policy statements
   2. Modern portfolio theory (MPT)
   3. Asset allocation/success of portfolio
   4. Market kaleidoscope
   5. The benefits of diversification
   6. Diversification and volatility
   7. Levels of diversification
   8. Diversification – 60/40 portfolio
   9. Expected return targets
   10. Portfolio management metrics
   11. Portfolio considerations
10. Investment Policy Examples
    1. New York State common retirement fund
    2. CalPERS pension example
11. Case Study
    In this case study, attendees will be asked to compare a myriad of investment alternatives. Tasks will include distinguishing investment characteristics, identifying risk, ranking investment options according to objectives and analyzing an investment portfolio. Attendees will then be asked to set an investment policy in line with objectives, construct a suitable investment portfolio and support all investment selections. The group will also discuss relevant investment issues.