Zaks Investment Advisory Service

Review. Why invest. Future subjects.

At first glance, the problem of investing may not seem very relevant. And sure enough, we all have many other more pressing problems. On other hand, we also have to think about the future, about college for our children or, if we are a bit older, about sources of income in addition to Social Security. And to prove that investing is also an immediate problem, and pretty tricky one at that, all you have to do is look at what happens to money on bank accounts: because of inflation, the real value of this money melts away. None of us like to lose money, so very few people keep large sums on their bank accounts. We invest them in the so-called “market.” But a market is a very broad and fairly amorphous concept. There are numerous alternatives to where and how investments could be made, and every person has their own criteria that make one strategy more appealing and another, for example, too risky and not very appropriate.

In our future programs, we will discuss many different things. Among them are:

various types of financial instruments and securities, such as stocks and bonds, what they are and how they work;
what types of returns you may expect from them;
the central role of diversification;
mutual funds (investment funds), how they function, and what you should look for when selecting a mutual fund;
the risk we assume when making an investment;
inflation (and how to protect yourself against it);
how different investors tolerate risk in different ways;
we will compare the stock market to the real estate market;
we will talk about interest rates, and who controls them;
we will also talk about the role of our central bank, the Federal Reserve, and how its decisions affect our daily lives;
the roles of Congress and the administration;
how oil prices affect stock market prices;
whether it is possible to “outsmart” the market, guessing its peaks at which to sell your stocks at profit, or troughs at which it would be best to buy;
what hedge funds are,

and many other topics.

Now, about things that we will only talk about in passing: this concerns stocks of individual companies. Of course, we will be mentioning individual stocks in the context of securities portfolio diversification, but we will not be analyzing them in detail. In case you are interested in specific analyses of individual companies, I could supply you with information offered by numerous brokerage firms.

And one more thing: what we will talk about should be of interest to investors. These are people who have placed, or are prepared to place, their money in the market for a fairly extended period of time. It will be of no interest at all to so-called “day traders” who perform several trades over the course of one day, buying and selling the very same stocks or options. In one of our future programs, we will talk about “day traders” and why I believe that this is not an appropriate strategy for our listeners.

I hope that these subjects will prove to be of interest to you, and supply you with news and useful information. On the whole, financial markets and investments play a fundamental role in our country’s economy: a market economy may not function without financial markets. Fifty percent of the adult US population owns stocks directly or through an investment fund. In other words, we will be talking about issues that play an immensely important role in this society: open up any newspaper and this will become immediately apparent – about a third of it is devoted to the financial markets.

The point of these programs is not to make professional investors out of our listeners. For the most part, their point is to give you an idea about which things you should be paying attention to, what opportunities and alternatives you have, about what you should and should not be expecting from the market.

And with that, we will draw our first program to a close. This was Sergey Zaks. Thank you for your attention and until next time.