Par Excellence Demo

Compared with capital gains (see below), dividends usually represent a very small part of a shareholder’s overall return on investment. This is the most lucrative part of investing. It’s also the most uncertain. If you buy 100 shares of a stock at $25 and sell those shares at $40, you’re investing $2,500 and getting back $4,000 minus trading costs. The difference of $1,500 is called a capital gain. The opposite of a capital gain is a capital loss. This would happen if you bought the stock at $25 and sold it for $15. Whenever you invest in a stock, you can never know in advance what your capital gain (or loss) will be. This is the part that scares people about stocks. It’s also where your research will come in handy. But the fact remains that no amount of knowledge will enable you to predict stock prices in advance. Investing in stocks is always based on an educated guess. It’s never a sure thing. Capital gains in the wrong one. Some mutual funds call their distributions to shareholders ‘dividends’ even though they are primarily made up of capital gains from the sale of stocks in the portfolio. These ‘dividends’ cannot be estimated in advance and are just as uncertain as any capital gain (or loss) you might receive from owning individual stocks. Dividends (mutual funds) This is all the money you end up with. In the case of stocks, it’s the combination of dividends and capital gains. In the case of bonds, it’s interest and capital gains. Total return Asset allocation is one of the most fundamental steps in investing. It is the process of determining how much of your portfolio should go into the three major asset classes: stocks, bonds and cash. When considering which type of financial product to purchase, it is important to first calculate how the assets you currently own are distributed. This is a relatively simple calculation. First find the total value of your portfolio. Divide that number by the value of your holdings in each asset class. This will give you a per centage of the total you have devoted to each particular class. Based on what you have learned about the different asset classes and then factoring in your own investment objectives, you should be able to make informed decisions about where to invest your dollars going forward. From the basics of stocks and bonds to developing more sophisticated investment strategies and beyond, the world of investing is vast. But with the right information and resources, women are poised and ready to get involved, get active and get investing with the tools they need to manage their money effectively. Sources: 1. Bankers Trust ‘Women on Wall Street’, as cited in Women and Diversity WOW! Facts, 2001 2. National Association of Investors Corporation as cited in Women and Diversity WOW! Facts, 2001 3. Paine Webber, as cited in Women and Diversity WOW! Facts, 2001 Asset allocation If there’s one thing just about everybody in the investment world agrees upon, it is the benefits of diversification. By definition, diversification is the process of dividing investment funds among a variety of securities with different risk, reward, and correlation statistics so as to minimize unsystematic risk. Simply stated, it involves spreading your money around rather than putting it all in one place. Why do this? Because the investment you think will do the best may not. Investments produce varying returns, and by having your money spread out, you reduce the risk of concentrating too much of your portfolio Diversification

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Par Excellence Demo Contents Why I am Optimistic about Women in Business All the Presidents, Women Maverick Who Took on a Start-Up-and Learned a Valuable Lesson Golf Advice to Women Golfers (And it's Not How to Hit a Ball) Lifestyle You Shall go to the Ball, Cinderella (But First you Have to Get Real...) Travel Health

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