Zero-coupon bonds trade at deep discounts without paying interest. Also known as accrual bonds, they are repaid at full face value at maturity. Can be issued by companies, governments, or financial institutions
Long-term investing allows for compound growth and lower transaction costs. Companies with strong margins and loyal customers provide resilience. Long-term investors avoid market volatility by holding positions
Investing means giving money to companies or governments for future growth. Investing differs from saving and trading, which are more frequent. Savings are guaranteed, while investments are not
S&P 500 tracks 500 largest US public companies by market capitalization. Index represents 80% of US stock market capitalization. Created in 1957 and tracks 500 companies
Compounding means reinvesting earnings to build on previous returns. It's called the eighth wonder of the world for its power. Compounded interest can power returns over time with patience
Buffett focuses on business value rather than market price fluctuations. He buys businesses, not individual stocks. He acts like a business owner rather than a stock trader. He grants management proxy votes to assure company values