Okay, here are some things that I THINK are important, but I am just not sure WHY…
P/E Ratios… Hmmm… I hear this all the time, but I really have no clue as to what this is, or why it is important.
Mutual Fund Load… I know this is the price you pay in up front fees for a mutual fund, but you also pay fees with a no-load fund, just not up front.
Discount Rate… I have no idea what this is, who gets it, or if it has anything to do with getting a bargain.
Bonds… I have no clue as to how a bonds value moves. I know that it is inverse to the interest rate, or something like that, but I don’t know what that means. I think my life span grows inversely to the amount of knowledge I have about bonds.
Calls, puts, shorts, margin… I can kinda figure these things out, but then I just get them all mixed up in my head.
Cash Flow… Okay, I am pretty sure that this has something to do with liquidity, but I don’t know why they don’t just say…”hey, I’ve got 100 dollars to spend on what I want or need..”
APR vs. APY… I am guessing that one is the stated annual percentage rate, and that the other is the actual annual percentage yield… but why these numbers are different is kinda hard for me to see… I THINK that APY treats the info as if your interest were compounded annually… but I could be completely wrong.
200 Day Moving Average.. Hmmm…I think that this is the average price of a stock over the last 200 days, with some goofy formula that gives more “weight” to the most recent price, or something like that. But I don’t know why you use 200 days, as opposed to 100 days, or 1000 days. Maybe you do.
Guidance… There was this weird guy at my high school, and if you had problems at home, you could go to him for guidance counseling… but I don’t think he had anything to do with THIS guidance… I have no idea what this term means…
LIPOR… No clue. I think that this is a cousin to the LIGER, a magestic and magical beast.
Well, you get the idea. There are tons and tons of financial terms that I don’t know anything about. These are just a few. But, you know what? I DO know enough to do the following.
Get out of debt. Save cash for emergencies and future big purchases. Put 15 percent of my income in good growth stock mutual funds. Budget my money. Find smart people and take good advice.