Investments 101

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Investments 101

• Linda J. Tice, CFP
• PSA Financial Center

• Advisory services offered through PSA Financial
  Advisors, Inc, 1447 York Road, Lutherville, MD
  21093, 410-821-7766.

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Plans are worthless, but planning is everything.

• President Dwight Eisenhower
• November 17, 1957

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Common Processes

• So What Does Investing and Project Management
  Have in Common?
• The Fundamentals

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The Fundamentals

• Investing
• Time
• Need
• Risk Tolerance Capacity
• Asset Allocation
• Security Selection
• Terms Conditions
• Purchase
• Monitor Control
• Return

• Project Management
• Scope
• Cost
• Schedule
• Risk
• H.R.
• Contract
• Procurement
• Monitor Control
• Quality

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Creating a Project Plan

• Define the Scope
• Reviews Approvals
• Risk Assessment
• Status Reports
• Project Team
• Schedule
• Estimate Staff Effort
• Budget

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Investing is just like a project

• Set Goals
• Develop Strategies
• Identify Options
• Assess Risk
• Develop Timelines
• Implement Plan
• Monitor Progress

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Define Problem

• Where are you ...
• Where do you want to go ...
• How long do you have ...

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Investment Process

• Define the problem
• Alternative strategies
• Plan
• Measure
• Adjust

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What is Investing?
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Why Should I Invest?
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Taking Care of Basics

• Cash Flow
• Emergency Fund
• Risk Management

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Liquidity

• Ability to access money quickly. Liquidity is
  required for Emergency Funds, and best in cash,
  checking, savings, credit unions and money market
  accounts.

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Asset Allocation

• Percentage of Equities, Bonds, Cash, and Real
  Property within an investment portfolio. A
  balanced Portfolio has a combination of cash,
  bonds, and stock.

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Risk Tolerance

• Your comfort level when investing. Your
  investing experience, time horizon, and feelings
  about money determine the amount of risk to take.
  
• How well do you sleep at night?

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Risk Capacity

• Your ability to weather financial risk of your
  investment principle. Usually associated with
  time and income.

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Mutual Fund

• Pooling of assets of many investors and invested
  with a common goal.

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Equities/Stock/Owner

• Ownership in either Stock or a Stock Mutual Fund.
  Market value fluctuates up and down.

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Bonds/Income/Loaner

• Income-producing investment from loaning money
  to a Government or Corporate entity with the
  promise of return of the principle plus interest.

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IRA

• Individual Retirement Account Tax deferred
  growth, and contributions may be tax deductible.

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Roth IRA

• Funded with after-tax money. Distributions may
  be tax free if certain requirements are met.

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Standard Deviation

• Risk measured by fluctuation in returns around an
  average.

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The first rule of project planning is to be
prepared to replan! No project manager has 20/20
foresight.
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Questions?
Linda Tice PSA Financial Center Linda_at_psafinancial
.com 410-821-7766
Thank You!