Investor Concepts

Investment Concept #1
Source: Investopedia
PERCs

PERCs - Convertible preferred stocks, which at a pre-determined maturity/redemption date converts to equity (cash or shares of underlying stock). PERCS can typically be redeemed before the maturity date, but at a premium of the cap price. If an investor does not redeem the shares within a three year period, the shares are converted to common stocks and the dividends are reverted to those that would be paid on common stock.



Investment Concept #2
Source: EthicalFunds.com
Psychology of the Market Phases

Many emotions can impact our investment decisions. It's not that we're irrational, but rather that we're human. No matter how well informed or experienced, most investors eventually fall victim to psychological factors that influence their investment decisions.

At market bottom: The media and investors believe that stocks are a poor investment, and that there is no compelling reason to buy stocks. Stock prices decrease.

Early stage recovery: Investor confidence is still hurting, but there are a number of savvy investors looking for bargains in the equity (stock) markets.

Mid-stage bull market: The media is no longer writing doom and gloom stories about the stock markets. The average investor is returning to buying equities.

Peak of bull market: Euphoria sets in. Everyone seems to own stocks and talks about higher prices.

Bear market: Consumer confidence wanes and the sentiment towards stocks is negative

Investment Concept #3

Source: EthicalFunds.com
Diversification

The word diversification meaning seems apparent at first but as I discovered there are several ways a stock portfolio can be diversified to manage risk. A few ways include

• Assets class- Stocks, bonds, and money markets are different assets classes
• Geographically
• Industry Sector
• Market Capitalization - a mixture of large and small companies