Week 14 was Thanksgiving week, and we had a guest speaker for our only day of class.  Paul Thompson, a portfolio manager with Morgan Stanley, was our guest speaker.  He spoke about understanding risk and the market.  He also spoke about developing a properly allocated portfolio.  Mr. Thompson started his presentation with some Greek history.  I love history and found his discussion very interesting.  He spoke about risk through the ages, how it was recognized, measured, and insured against.  He covered famous people and topics from the ancient Greeks to more modern times like Von Newman's invention of game theory.  It was an educational and interesting presentation.

My article for week 14 is called "Estate Planning: Introduction to Trusts" from www.investopedia.com.  During this week I was doing research for our group project on estate planning.  One of the topics that I had to research was trusts.  I found this interesting and informative article on trusts.  The article explains the two types of trusts: living and testamentary.  It also goes over the differences between revocable trusts and irrevocable trusts.  Irrevocable trusts are used in estate planning.  My research on trusts became more in depth over time, but I felt this article was a good starting point.

During week 13 our class covered Chapter 16 Real Estate Investment, Chapter 17 Retirement Planning, and Chapter 18 Estate Planning.  Chapter 16 covers real estate investment not for residential use.  Location is the number one factor in whether a property is valuable.  From an investment standpoint your house is not an asset.  The most important disadvantages of real estate investing are legal fees and illiquidity.  Chapter 17 consisted of retirement planning, and most financial planners deal with retirement planning.  It is a very applicable topic.  The chapter discussed the aspect of social security benefits.  Social security is not enough to live on after retirement.  Retirement plans in Chapter 17 include defined benefits plans and defined contribution plans.  The popular 401K is an example of a defined contribution plan.  This chapter also covered the traditional IRA and the Roth IRA.  It covered the differences and the tax implications of the different IRAs.  The final chapter in our textbook is Chapter 18, Estate Planning.  This chapter covered many aspects of estate planning such as probate, wills, executors, trusts, estate taxes, and gift taxes.  Everyone should have a will no matter their financial situation.  The chapter also covered power of attorney and living wills.  All students in our class were assigned group project topics.  My group was assigned estate planning so I learned a great deal about estate planning over the course of this semester.

My week 13 article is "Should You Separate or Joint Accounts?" from www.kiplinger.com.  I chose this article because I find this topic interesting.  My husband and I have all joint accounts, but I have other family members who do not share some bank accounts with their spouses.  The main idea of the article is that each couple will need to decide what works best for them.  Some couple share all accounts, some share none, and some couples share certain accounts.  Couples should always keep the money management lines of communication open.

During week 12 our class covered Chapter 14 on Investing in Stocks and Bonds and Chapter 15 on Investing through Mutual Funds.  Before I took Finance 3060, I thought that financial planning was all about Chapter 14 material.  I now know that financial planning encompasses much more than stocks and bonds.  It was stated in class that the public has become more dependent on packaged investments in recent history.  Over time the stock market usually has a return of twice the bond market.  The stock market is geared to go up because businesses are in business to make money and improve.  The book stated that corporate earnings are the most important way to evaluate stock values.  Bonds are more difficult to price and trade than stocks because there is no actual marketplace to trade them like the stock exchanges.  The book mentioned different types of yields such as current yield and yield to maturity.  Chapter 15 covered mutual funds.  These are monies pooled by investment companies to buy stocks, bonds, and other investments.  Some benefits of mutual funds are diversification and reduced risk.  They also help level the playing field between corporations and individual investors.

"Assessing the Needs of an Aging Parent" is the title of the article that I read for week 12.  The article comes from www.massmutual.com.  I chose this article because I do have aging parents, one of which is critically ill with cancer.  The article states a list of questions to ask your parents.  These questions can help you approach sensitive topics that need to be discussed.  The article also suggested that long term care insurance can provide a measure of support for many families with aging parents.  I have discussed most of the topics the article suggested with my parents.  There are a few that I had not thought of as a problem.  I will be sure to bring up these topics in the future.

Week 11 only included one day of class because the Thursday was part of fall break.  During the Tuesday class we finished Chapter 13 on Investment Fundamentals that we had started on our own last Thursday.  It was stated that time is the most valuable component of investing.  Basically we have two investment choices, lending investments and ownership investments.  Lending investments include bonds.  Ownership investments include stocks.  This chapter covered the nine sources of risk in the risk-return trade-off.  A few of these risks are interest rate risk, inflation risk, and market risk.  We discussed the differences between a bull market and a bear market.   It was said that you should not invest if you cannot hold the investment for at least 3-5 years.  Again time is the important component of investing.

The article that I chose for week 11 is "Giving To Charity-4 Smart Strategies" from www.schwab.com.  The article lists four financial charitable giving ideas.  They consist of a charitable remainder trust, a pooled income fund, a private foundation, and a donor advised fund.  The charitable remainder trust is a trust that you control and put money into.  You receive income from the trust for a certain number of years, and then the remainder goes to the charity.  The pooled income fund is a way for charities to pool the funds of different individuals and invest them.  A private foundation is a tax-exempt charitable organization set up by a person or persons.  This is more costly and complicated than the other strategies.  The final idea is a donor advised fund.  This fund is a pool of money from donors managed by the charity.  These are all great ideas for giving to charity.

On Tuesday of week 10 we took exam 2 on Chapters 4-11.  On Thursday, class was cancelled, but we were responsible for Chapter 13 on Investment Fundamentals.  Chapter 13 contained information about investing versus speculating and setting investment goals.  It also review time value of money which we covered earlier this semester as well as in other business courses.  One of the topics towards the beginning of Chapter 13 was the different rates of return.  Nominal rate is the rate of return without adjusting for inflation.  The real rate is the inflation adjusted rate of return.  We will continue with Chapter 13 next week.

My article this week is titled "529 Plans: The Ins and Outs of Contributions and Withdrawals" from www.ameriprise.com.  I have children in elementary school and have thought about saving for college but have not been able to afford the expense.  When I graduate, this is one of the financial goals that I have set for myself.  This is why this particular article seemed very relevant to me.  The article stated that most states have contribution limits of $300,000 and up.  It stated that minimum contributions vary by plan.  Also qualified withdrawals are tax free.  After I have a job, 529 plans for my children will be a priority.