[Intro Music]
On-screen Disclaimer:
Please read important information at the end of this program. Recorded on 10/11/2024.
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Theadora Lamprecht. Investment Strategist, Chief Investment Office, Merrill and Bank of America Private Bank.
[Theadora Lamprecht speaking throughout video.]
You don't need to be a gazillionaire to buy a company or even a bunch of them. That's what stocks are for.
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Stock
[Animated speech bubbles contain the following financial terms]
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Bond Ladder, Dividend Yield, Asset Allocation, P/E Ratio, Alternative Investments, Diversification, Total Return, Market Breadth, Yield Curve, Net Asset Value, Soft Landing, Translation, Please!
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Stocks
Stocks, also called equities, offer you partial ownership of a company, sold in small pieces or shares.
[Chart titled "Stocks a.k.a. equities" with a single owner with multiple shares going into one company.]
Historically, they have seen better returns over time compared to bonds or cash, which makes them important for investors to understand and include in their asset allocation. So, how can you become an owner?
[Line graph titled "Stocks a.k.a equities" showing stocks having larger but less steady growth than bonds or cash.]
You could buy shares of a single company.
[Image with one owner having six shares in one company.]
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Company Performance.
While that's great if things go well, a lot rests on that single company's performance. So it's probably a good idea to diversify or invest in more than one company.
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Diversify: By investing in more than one company.
Ways to Diversify Through funds: Mutual Funds and Exchange Traded Funds.
Graphic of a person above two squares labeled "Mutual funds" and "Exchange Traded Funds." Below that are seven buildings representing different companies.]
Mutual funds and exchange-traded funds or ETFs can help you diversify by pooling money together from you and others that are then used to buy shares in many different companies. You can further diversify by type of company. For example, you might include different sizes, like large caps and small caps, or different sectors, like information technology or healthcare.
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Way to Diversity Through funds: Large Caps, Small Caps, Information technology, Healthcare.
[Graphic of a building labeled "Large caps" is nect to a small house labeled "small caps." Icons of a phone, a which person with VR headset and a healthcare shield pop up, represent different sectors.]
Or you can even complement your U.S. stocks with different regions, such as Europe and the emerging markets.
[Map appears with Europe, China, India, Indonesia, South America and Mexico highlighted.]
[Line graph titled "Volatility" with a lot of ups and downs.]
Even when you diversify, volatility can still drive the value of your investment portfolio up or down. But in the long run, their short-term peaks and valleys may matter less. That's why stocks are likely to offer you potential opportunity for long-term growth, to help you meet your goals as part of a balanced portfolio.
[Pie chart of an investment portfolio showing lots of stocks.]
And that's a quick look at stocks. Thanks for watching and stay tuned for more "Translation, Please!"
On screen disclosures:
Important Disclosures
The opinions expressed are as of 10/11/2024 and are subject to change.
Investing involves risk, including the possible loss of principal. Past performance is no guarantee of future results.
Asset allocation, diversification and rebalancing do not ensure a profit or protection against loss in declining markets.
Mutual Fund and Exchange-Traded Fund (ETF) investing involves risk, Mutual Fund or ETF shares are not guaranteed or insured by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. Investment returns may fluctuate and are subject to market volatility, so that an investor's shares, when redeemed or sold, may be worth more or less than the original cost.
Investments have varying degrees of risk. Some of the risks involved with equity securities include the possibility that the value of the stocks may fluctuate in response to events specific to the companies or markets, as well as economic, political or social events in the U.S. or abroad. Investments in foreign securities (including ADRs) involve special risks, including foreign currency risk and the possibility of substantial volatility due to adverse political, economic or other developments. These risks are magnified for investments made in emerging markets. Bonds are subject to interest rate, inflation and credit risks.
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