• Series 6 Lessons Audio Lessons for the FINRA Series 6 Exam

  • By: Franz
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Series 6 Lessons Audio Lessons for the FINRA Series 6 Exam

By: Franz
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  • Summary

  • The Series 6 Lessons is a podcast for those preparing for the FINRA Series 6 Exam. It consists of portions of lessons designed to help the student prepare and pass for the series 6 Exam. The series 6 Exam is an entry level exam allowing those who pass the exam and work for a firm licensed to sell investment company products and variable contract products. The FINRA Series 6 Exam assesses the competency of an entry-level representative to perform their job as an investment company and variable contracts products representative. Candidates must pass the Securities Industry Essentials (SIE) exam and the Series 6 exam to obtain the Investment Company and Variable Contracts Products registration For the SIE Exam refer to the SIE Podcast available on Apple Podcasts
    ©2020 Franz Amussen All Rights Reserved
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Episodes
  • Series 6 Lesson 9 Mutual Funds pt 2 2023

    Series 6 Lesson 9 Mutual Funds pt 2 2023
    Mar 21 2023
    Series 6 Lesson 9 Mutual Funds pt 2 Series 6 Lesson 9 Mutual Funds pt 2 Fund of Funds = a mutual fund that holds shares of many other funds Principal Protected Funds = These funds are focused on protecting the investor’s principal. They take many steps in order to keep everything stable. These can be expensive. Every mutual fund will have a prospectus that can help you understand their strategy, such as what kinds of investments they go after or what kind of strategies they employ. It is a good place to start when comparing mutual funds. They will often show the historical performance of the fund over time as a way to show what investors might expect in the future. They always have the disclaimer “past results are not predictive of future results”. All funds have different expenses that are usually deducted from the proceeds. Some funds have a sales expense. This is detailed in the prospectus. Capital appreciation happens when a mutual fund goes up in value. The mutual fund will pay out dividend on all the stock and bonds that are part of the fund. They will also give capital gains dividends to shareholders if they can. After fulfilling these requirements, the fund is then compared to where it was when it started to calculate the net asset value. If you start with $15 per share and end at $17 per share, that is $2 in capital appreciation.  You also have to take any applicable taxes into consideration. Fees can either be classified as A-shares, which charge fees up front or B-shares, which charge fees when you sell. Some funds charge a percentage fees called 12b-1 fees. C-shares do not charge an upfront fee, but they have high 12b-1 fees. A shares: long term with over $50,000 B shares: mid or long term with a small investment C shares: short term investor with less than $500,000 to invest Series 6 Lesson 9 Breakpoints The more that you invest, you can qualify for breakpoints, which is a reduction in the sales charge. The more you invest, the more you can save, based on different breakpoints. When you want to cash in your shares, this is known as redeeming your shares. When you do this, you get the NAV per share, minus any charges if they are A-shares. This will require a signature under certain conditions: -If the redemption is over $75,000. -If the redemption is to someone other than the registered shareholder -If the redemption is sent to an address other than the address of record. Some funds will charge a redemption fee if you try to redeem them during the first year. They want you to hold onto your investment. Investors can also set up an automatic withdrawal plan. They can get a fixed periodic payment, such as $500/month or a certain percentage every so often, quarterly, etc. You can say that you want to sell X number of shares every so often, or you can have it withdrawn over a specific amount of time, two years, etc. A mutual fund has a Board of Directors. They establish investment policy, they appoint other people oversight positions, establish policies about capital gains and dividends, and review/approve 12b-1 plans. They oversee operations, but do not make the investment decisions themselves, just like any normal company. The investment adviser/portfolio manager is appointed by the BOD. He or she is the one who actually manages the fund’s investments according to the fund’s stated policies.  They are paid a percentage of the fund’s net assets. The custodian is a bank that holds all of the assets of the mutual fund, such as cash and securities. They are the container for all of the fund’s securities. The transfer agent is the party that issues shares of the mutual fund to buyers and redeems shares from sellers. They distribute dividends to investors. Mutual fund shareholders are like normal company shareholders and so they get to vote about matters of fund business, such as when there are changes in investment strategies, changes in fees,
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    11 mins
  • Series 6 Lesson 8 Mutual Funds pt 1 2023

    Series 6 Lesson 8 Mutual Funds pt 1 2023
    Mar 14 2023
    Series 6 Lesson 8 Mutual Funds pt 1 Series 6 Lesson 8 Mutual Funds pt 1 is our first discussion on Mutual Funds This is a big investment portfolio that can give as many shares as investors want to buy. The shares of the fund do not change value when investors buy shares. Shares become more valuable when the securities in the portfolio give out income. There is no guarantee that the securities will gain in value. These funds are strongly diversified and run by a professional investment advisor. This helps people invest without too much effort. Advantages: -You have the expertise of a professional investor. -It is easy to diversify -You can liquidate some part of it without losing diversity -It is simpler on taxes -It is easier to keep records about -Easier to purchase -Automatic reinvestments of capital gains Ways that Mutual Funds Diversify -Different kinds of industries -Types of investments instruments -Types of securities issuers -Different geographic areas Types of Mutual Funds Equity Funds: These focus in investing in equity securities. Growth Funds: Invest in companies that are aggressively growing. They have high prices, but can bring in high returns. Value Funds: These have a low price, but offer low returns. Blend Funds: In the middle between value and growth funds. Growth and Income Funds: A mix of some stocks that are growing and some that provide dependable income. International Funds: Invests in companies outside the U.S. Global Funds: Funds in the U.S. and in other countries. Bond Funds: Collections of bonds together. Treasury funds have low risk/yield and corporate bond funds have high risk/high yield. These are taxable. Tax-Exempt Bond Fund: These are collections of municipal bonds. Money Market Mutual Funds: Tax free, very low returns. Keeps a stable value. Specialized Fund: These funds specialize in a certain strategy, just one industry or group. Asset Allocation Funds: These funds will allocate your funds on your behalf. Precious Metals Funds: Invests in precious metals, such as gold, silver, and platinum. Hedge Funds: These are funds that are only available to accredited investors that have over $1 million in net worth and makes more than $200,000 per year. If they are married, they can pool their net worth and they have to make at least $300,000 per year. Hedge funds use diverse, high-risk strategies, which means that people need to have some money in the bank. They are illiquid. They cannot be sold for at least a year. They charge high management fees and about 20% of the gains. Even if you are non-accredited investors can buy mutual funds that invest in hedge funds. We also offer lessons for: The Series 7 Exam https://gumroad.com/l/ILYu The Series 22 Exam https://series6lessons.com/series-22-exam/ The Series 63 Exam https://series6lessons.com/series-63-exam-lessons/ The Life Health Insurance Exam https://series6lessons.com/insurance-lessons/ The SIE Exam (Securities Industries Essentials Exam) https://series6lessons.com/finra-sie/ Click on any of them to find out more
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    11 mins
  • Series 6 Lesson 7 Time Horizon 2023

    Series 6 Lesson 7 Time Horizon 2023
    Mar 7 2023
    Series 6 Lesson 7 Time Horizon In Series 6 Lesson 7 we discuss Time Horizon Time Horizon You have to think about the time horizon of your investments. The longer the time horizon the more volatility the person who is investing can withstand. The longer you have, the more you a risk and vice versa. If you only have a few years, it is probably good to stay out of the stock market, but if you have a longer timeframe, the stock market can be a better choice, because you can withstand more volatility.  If you are a young investor trying to invest so that you will have retirement money, they can take more risks that will have ups and downs, because they have more time to recoup potential losses. If you are older and are using investments for income, you will need to have lower-risk investments. Three Major Factors Investment objective Time Horizon Risk Tolerance U.S. Treasury Bonds These are very safe, but also low yield. There is no risk of default and you are going to get the entire amount at maturity. There are different categories of bonds based on how much time you have. Short term = T-Bills. Mid term = T-Notes Long term = T-Bonds. T-STRIPS are bought at a deep discount and then they make money when the bond matures by getting the face value back. ($500 price, then matures to $1000). Non-Marketable Government Securities  Series EE Bonds: Purchased at a discount and redeemed at their face value when they mature. The taxes can be deferred until maturity or they can be converted into HH Bonds. Series HH Bonds: These can only be purchased by converting Series EE Bonds at maturity. They pay semi-annual interest, and they can be redeemed for their face value at any time. I-Bonds This is issued by the U.S. Treasury, which means that it is backed and exempt from state and local income taxes. It has a guaranteed rate, which can rise if inflation rises. The interest is added to the value of the bond, which means taxes can be deferred. If you use the proceeds for education costs, then the income is tax free. (Has to be within the same year as the redemption of the bonds) All of these types of bonds are “non-marketable”, which means that they cannot be traded.  That is why they are sometimes called “Savings Bonds” Municipal Bonds  A municipality is any state or local government. (school district, park districts, etc) These are bond issued by these governments. They pay tax-free interest to investors. This means that they pay lower rates than corporate bonds, but you will still probably come out ahead, because you do not have to pay taxes. You can be taxed by other governments that did not issue the bond, but not by the issuing government. Mortgage Backed Securities  Mortgages are pooled together and packaged and then sold to investors. These investors get interest and principal payments from that pool. These debts are eventually paid off and might even be paid off earlier than scheduled, which is known as prepayment risk. GNMA is the Government National Mortgage Association, sometimes Ginne Mae. If you buy a pass-through certificate from GNMA, you get a mortgage-backed security that is backed by the U.S. Treasury. FNMA is sometimes called Fannie Mae and if you buy through them, the U.S. Treasury is not required to bail out investors, but it can choose to do so. CMO  This is a collateralized mortgage obligation It also gets value from mortgages and mortgage-backed securities that are called tranches, which are grouped by when they mature. (become amortized) REMIC  This is a Real Estate Mortgage Investment Conduit. This is another kind of mortgage backed pass-through vehicle. They are separated into different risk classes, not different maturity classes. Money Market Securities Money market are debt securities, not including stock, that are going to mature in a year or less. These are securities that are highly liquid. They pay short-term interest rates,
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    11 mins

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