FIN3090 Personal Investment Planning 2

Advanced · 1 credit · BIT - Business, Admin, Finance and IT

Description: Students expand their knowledge of investing by analyzing the financial statements of a variety of companies, interviewing and critiquing an investment advisor, and creating investment portfolios using the steps of intelligent investing for short-term and long-term goals.
Prerequisite: FIN3080: Personal Investment Planning 1
Parameters: Access to an appropriate computer work station and the Internet.
Supporting courses: FIN3040: Financial Statements

Outcomes The student will:

1 calculate ratios and evaluate and compare the financial statements of separate companies
- 1.1 evaluate a variety of companies through their financial statements
- 1.2 calculate a company’s financial positions through its:
  - 1.2.1 balance sheet; e.g., working capital ratio, debt/equity ratio
  - 1.2.2 income statement; e.g., earnings per share, price per earnings ratio, dividend yield
2 critique an investment advisor
- 2.1 identify the different designations of professionals in the field of investment and financial planning including:
  - 2.1.1 Certified Financial Planner (CFP)
  - 2.1.2 Fellow of Canadian Securities Institute (FCSI)
  - 2.1.3 Canadian Investment Manager (CIM)
  - 2.1.4 Chartered Financial Analyst (CFA)
  - 2.1.5 Financial Management Advisor (FMA)
- 2.2 research and determine the criteria for selecting an investment advisor
- 2.3 describe how an investor is protected under the Canadian Investors Protection Fund
- 2.4 evaluate an investment advisor
3 research and build a Retirement Savings Plan (RSP) investment portfolio using the steps of intelligent investing and taking into consideration the age and lifestyle of the investor, the specific goals and financial objectives of the investor and the risk tolerance of the investor
- 3.1 examine the history of the stock market over the past 50 years to:
  - 3.1.1 identify bull and bear markets
  - 3.1.2 find patterns between risk versus returns
- 3.2 discuss the role inflation plays in determining actual or real return on investments
- 3.3 compare the risks and returns between a variety of stocks, bonds and mutual funds
- 3.4 calculate actual returns on a variety of investments
- 3.5 discuss the social and ethical implications of purchasing stocks in certain companies; e.g., ethical investing such as environmental and social viewpoints
- 3.6 describe the characteristics of a Registered Retirement Savings Plan (RRSP) including:
  - 3.6.1 investment portfolio created over a lifetime
  - 3.6.2 asset allocation; e.g., cash/cash equivalent, fixed income, diversified equities, mutual funds
  - 3.6.3 maximum tax deductible contribution per year; e.g., 18% of previous year’s earnings
  - 3.6.4 amount of Canadian content (70%) and foreign content (30%)
- 3.7 examine the advantages and disadvantages of investing in an RRSP in Canada
- 3.8 describe the characteristics of a Registered Education Savings Plan (RESP)
- 3.9 describe the tax implications of investing including:
  - 3.9.1 tax on interest
  - 3.9.2 tax on dividends
  - 3.9.3 tax on capital gains
  - 3.9.4 tax sheltered until stock is sold
  - 3.9.5 tax sheltered until RRSP is cashed in
- 3.10 analyze asset allocation in relation to the life stage of an investor
- 3.11 re-evaluate investor’s tolerance for risk
- 3.12 investigate other strategies for reducing risk; e.g., dollar cost averaging
4 research and build an investment portfolio for a short-term goal using the steps of intelligent investing and taking into consideration age and lifestyle of the investor, specific goals and financial objectives of the investor and risk tolerance of the investor
- 4.1 describe the different types of financial service companies including:
  - 4.1.1 banks
  - 4.1.2 trust companies
  - 4.1.3 insurance companies
  - 4.1.4 mutual fund dealers
  - 4.1.5 full-service brokers
  - 4.1.6 discount brokers
- 4.2 discuss the Financial Consumers Act in terms of:
  - 4.2.1 how the Act protects investors
  - 4.2.2 what financial products and services are covered
  - 4.2.3 what rights and responsibilities investors have when buying financial products and services
  - 4.2.4 what the Act says about disputes, financial planners and plain language
- 4.3 describe the steps of intelligent investing to build an investment portfolio including:
  - 4.3.1 set specific goals and financial objectives
  - 4.3.2 match investment objectives to asset classes
  - 4.3.3 analyze and select investments within the different asset classes in terms of risk, return, liquidity and time
  - 4.3.4 spread out risk; diversify the portfolio through size, style, sector and geography
- 4.4 develop an investment plan using the steps of intelligent investing:
  - 4.4.1 for a short-term goal of under five years; e.g., a vacation, a car
  - 4.4.2 for a long-term goal of 20 years or more; e.g., retirement
- 4.5 discuss the concept and value of being part of an investment club
- 4.6 demonstrate how the Internet can be used as an investment tool to:
  - 4.6.1 learn investment concepts and strategies
  - 4.6.2 research companies
  - 4.6.3 get stock and bond quotes
  - 4.6.4 investigate mutual funds
  - 4.6.5 create mock portfolios
  - 4.6.6 take concept tests
- 4.7 distinguish between fact and fiction when using the Internet for investing
- 4.8 identify the pitfalls of the Internet as an investment tool
5 demonstrate basic competencies
- 5.1 demonstrate fundamental skills to:
  - 5.1.1 communicate
  - 5.1.2 manage information
  - 5.1.3 use numbers
  - 5.1.4 think and solve problems
- 5.2 demonstrate personal management skills to:
  - 5.2.1 demonstrate positive attitudes and behaviours
  - 5.2.2 be responsible
  - 5.2.3 be adaptable
  - 5.2.4 learn continuously
  - 5.2.5 work safely
- 5.3 demonstrate teamwork skills to:
  - 5.3.1 work with others
  - 5.3.2 participate in projects and tasks
6 create a transitional strategy to accommodate personal changes and build personal values
- 6.1 identify short-term and long-term goals
- 6.2 identify steps to achieve goals