Amanda Stanhaus

Tag: risk

Arbitrage

Buying an asset in one place and simultaneously selling it for a higher price in another place. A chance to make money, without risk.

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

Money Market Mutual Fund

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I went toe to toe with Babe’s boy and won! I love when women win sword fights.

Money market deposit account vs. Money market mutual fund, which is FDICinsured?

(click on the bold-faced vocab word:))

Babe’s boy WRONGLY believed both were FDIC insured.

My magical memorization skills helped me with my win.

Money market deposit accounts are higher-than-usual interest earning, limited withdrawal accounts. Offered by a bank. FDIC insured.

Money market mutual funds similarly are higher-than-usual interest earning, limited withdrawal accounts. Offered by a mutual fund. Not insured by FDIC.

These mutual funds invest in liquid, short-term investments. Think treasuries. As with all mutual funds, your investment is at the mercy of the markets, and is not FDIC insured.

Both are ideal investments for those who withdrawal infrequently and are looking for higher-than-usual interest payments. Handy for say an emergency fund. But fully understand the risks and rewards of deposit accounts vs. mutual funds.

Good luck in your sword fights! Go girls!

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(Originally published on Amanda Stanhaus’s financial literacy blog: XO, Bettie.)

Investment Style

Risk lover or hater. Black/white or color blocking.

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

Risk Rollover

Next time I’ll pay. Instead, I take out even more debt to meet the payment deadline. America is a regular roller.

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

Risk Tolerance

Can I handle this? Of course I can! But will I be able to sleep at night?

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

Bond

Bonds are not redeemable to meet James Bond. Bummer…

(click on the bold-faced vocab words:))

Instead, Uncle Sam is starving. He needs me to spot him some $$. A bond is a more official version of spotting $$.

I’ll get my $$ back when the bond matures.

A bond’s coming of age story includes semi-annual coupon payments until Uncle Sam returns my $$.

Companies also sell bonds. Corporate bonds are thought to be riskier than government bonds. A company cannot directly control its revenue and cash flow like a government can (i.e. tax policy and printing $$).

If the American Government is unable to pay me back, most likely we will have bigger problems on our hands (à la alien invasion). A space helmet could be a fun new accessory though!

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(Originally published on Amanda Stanhaus’s financial literacy blog: XO, Bettie.)