1. Intro
Now I have learned something about investment, especially about low risk and medium risk investment.
For low risk investment, the money fund market maybe the best for now, 5% APY is not bad
For medium risk investment, I guess the SP500 should be fine, it will capture the overall economic situation
For the high risk investment,
- What options do I have
- What’s the pro and con of each of them
- Tax consideration
2. Options
Individual stocks: single companies
Cryptocurrencies
VC: venture capital, investment in early-stage companies
Leveraged ETF: use financial derivatives to amplify the return of an underlying index
Options and Futures: contracts provide the right but not obligation.
3. Stock
How to predict stock price?
- Market trend
- Economic indicator
- Company specific
3.1. Fundamental Analysis
Goal: measure a security/stock/bond etc’s intrinsic value
How: examine related economic and financial factors
What: financial situation, current market and economic conditions
Usage: determine the number with current price
Sources: 10Q (quarterly), 10K(annual), 8K(must report event)
Assumption: stock’s current price often does not fully reflect the value of the company
3.1.1. Quantitative Method
Balance sheet: Assets=Liabilities + Shareholder’s Equity
- Just the snapshot
Income Statement: revenue, expense, profit
Statement of Cash Flow: inflow and outflow over a period of time
- Hard to manipulate
Revenue growth
P/E Ratio: price / earning per share