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Financial Literacy Club

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Investing · Lesson 8

Portfolio Basics

Part A. Vocabulary

Write the letter of the matching definition on each line.

  1. 1. Portfolio
  2. 2. Asset allocation
  3. 3. Rebalancing
  • A. All of your investments together.
  • B. Bringing your mix back to its target. If stocks grow faster, they become a bigger share of your portfolio than you planned; rebalancing trims them back.
  • C. How your portfolio is divided among types of investments — mainly stocks, bonds, and cash. It's usually the biggest driver of how much a portfolio swings.

Part B. Guided notes

Fill in each blank using the word bank.

Word bank: brings · investing · portfolio's · returns · stocks

  1. Asset allocation drives most of a ups and downs.
  2. Rebalancing your mix back to target.
  3. Target-date funds shift from to bonds over time.
  4. Speculating ≠ .
  5. Guaranteed = red flag.

Part C. Check your understanding

Circle the best answer.

  1. 1. What usually drives how much a portfolio swings in value?

    • A. The day of the week you invest
    • B. Its asset allocation — the mix of stocks, bonds, and cash
    • C. The brokerage's logo
    • D. How often you check it

  2. Your target mix is 70% stocks and 30% bonds. After a strong year, it's 80% stocks and 20% bonds.

    2. What would rebalancing do?

    • A. Sell everything
    • B. Buy more stocks since they're winning
    • C. Shift money from stocks back to bonds to return to 70/30
    • D. Nothing — targets don't matter

  3. An online ad promises "guaranteed 15% monthly returns" if you invest today.

    3. What's the right conclusion?

    • A. Invest a little to test it
    • B. It's legitimate if the website looks professional
    • C. It's almost certainly a scam — real investments don't guarantee returns
    • D. Tell friends so they can get in early

  4. 4. Day trading is a reliable way for beginners to grow money quickly.

    True/False

Part D. Apply it

Show your work.

  1. 1. Your target is 80% stocks and 20% bonds. After a great year you have $10,000 split 90% stocks and 10% bonds. How much should you move to get back to 80/20?

  2. 2. What does a target-date fund do over time?

Part E. Think about it

Answer in complete sentences.

  1. 1. Why do you think investing scams target young people on social media?

  2. 2. What's the difference between a risky investment and a scam?

Exit ticket

Name

Name two differences between investing and speculating.