Translation, Please!™

PE/Ratio
Diversification
Asset Classes
Yield Curve

From yield curve and P/E ratio to asset allocation and diversification, investing can seem like it has a language all its own. In the videos below, we break down some of the key terms you need to know. So go ahead, check out what the yield curve means — and come back often as we add new content on a regular basis.

Stock Market Indexes  video

Length 02:01
[Music at open]
On screen copy:
Please read important information at the end of this program. Recorded on 8/28/2024
[Tony Ghee speaks throughout video]
There are over 50,000 companies listed in stock markets across the world. How can you possibly make sense of it all?
That's where stock market indexes comes in.
On-screen copy:
Stock Market Indexes
[Animated speech bubbles containing the following financial terms.]
On-screen copy:
Bond Ladder
Dividend Yield
P/E Ratio
Asset Allocation
Alternative Investments
Diversification
Total Return
Yield Curve
Market Breadth
Soft Landing
Net Asset Value
On screen copy:
Stock Indexes
On screen copy:
Tony Ghee
Head of Equity Investments & Portfolio Management, Chief Investment Office, Merrill and Bank of America Private Bank
A stock market index is basically just a list of companies that represents a portion of the market, tracking their average performance daily.
[The three blue squares now occupy the full screen. Above them in large letters reads, "Stocks Indexes" Each bar is labeled. The first blue square reads, "DJIA," the second, "S&P 500," and the third, "NASDAQ."]
There are three major indexes in the U.S.
[As Tony speaks, the blue boxes with the headline "Stock Indexes" are over his right shoulder.]
Following them on a regular basis is a useful way of getting a quick look at how a part of the market is doing at a particular moment in time.
[The three blue squares occupy the full screen again. The first blue square that reads, "DJIA" is now a light blue color.]
Indexes don't need to be long lists. For example, the Dow Jones Industrial Average is just a list of 30 of the largest publicly traded U.S. companies selected by a committee for their solid earnings record.
[As Tony speaks, the words, "30 large companies, sold earnings" slide into the light blue, DJIA box.]
[The three blue boxes are over Tony's right shoulder again, labeled, "Stock Indexes." The first box has been replaced by an arrow pointing up.]
When the Dow is up, that's generally considered a bullish sign for the direction of the stock market overall.
[At the words "bullish sign", the first blue box then reappears and reads, "DJIA."]
[The three blue squares with the title, "Stock Indexes" occupy the full screen again. The first dark blue square reads, "DJIA." The second reads "S&P 500" and is light blue. The third, dark blue square reads, "NASDAQ"]
The S&P 500 is a larger list — 500 publicly traded companies — so it provides a broader picture of the health of the U.S. economy.
[The words, "500 companies" are added underneath "S&P 500" in the second, light blue box. The box expands outward, indicating that it is a larger stock index. Icons of a truck, a building and a phone appear in the light blue box to represent the economy]
[As Tony speaks, three blue boxes labeled, "Stock Indexes" are over his right shoulder again. The first two dark blue boxes are labeled "DJIA" and "S&P 500." The third box is a lighter blue and labeled, "NASDAQ."]
[The three bars appear full screen again. The first two are dark blue. The first one is labeled, "DJIA," and the second one is "S&P 500." The third box, labeled "NASDAQ," is light blue. As Tony speaks, the words "5,000 companies" appear under the word "NASDAQ" as it swells larger. Icons for an electric car, an isotope and a bolt of lightning appear in the box.]
The NASDAQ is the third of the major U.S. stock indexes. Listing more than 5,000 companies worldwide, it focuses mainly on technology companies, so it can offer a useful snapshot of the tech sector.
[On screen animation of an icon of a head next to a box labeled, "Dow" with an up arrow and the number "300." As Tony speaks, a red chart line moves up and down within the box. When Tony talks about the S&P 500, the box reads "S&P 500" and the chart line moves up and down.]
When your favorite financial reporter says that the Dow closed up 300 points at the end of the trading day, or the S&P 500 or Nasdaq set a new record, that's telling you that companies tracked by those indexes are in demand by investors. The reverse holds true if the indexes report declines.
[On screen animation of an icon of a head next to a box labeled, "NASDAQ" with a down arrow.]
Finally, it's important to remember that you cannot invest in an index itself, though there are mutual funds and exchange traded funds that aim to mimic the makeup and performance of these indexes.
[As Tony speaker, three blue boxes labeled, "Stock Indexes" are over his right shoulder again. Each dark blue box is labeled "DJIA" and "S&P 500" and "NASDAQ." The words "Mutual Funds & ETFs" appear under the three dark blue boxes when Tony mentions them.]
[On-screen copy]
Stock Market Indexes
So now you know what stock market indexes are and how to use them. Thanks for watching and stay tuned for more Translation, Please.
On screen disclosures:
Important Disclosures
The opinions expressed are as of 10/7/2024 and are subject to change.
Investing involves risk, including the possible loss of principal. Past performance is no guarantee of future results.
Indexes are unmanaged and do not take into account fees or expenses. It is not possible to invest directly in an index.
Mutual fund and exchange-traded fund (ETF) investing involves risk. Mutual fund or ETF shares are not guaranteed or insured by the Federal Deposit Insurance Corporation or any other government agency. Investment returns may fluctuate and are subject to market volatility, so that an investor's shares, when redeemed or sold, may be worth more or less than their original cost.
This information should not be construed as investment advice and is subject to change. It is provided for informational purposes only and is not intended to be either a specific offer by Bank of America, Merrill or any affiliate to sell or provide, or a specific invitation for a consumer to apply for, any particular retail financial product or service that may be available.
The Chief Investment Office (CIO) provides thought leadership on wealth management, investment strategy and global markets; portfolio management solutions; due diligence; and solutions oversight and data analytics. CIO viewpoints are developed for Bank of America Private Bank, a division of Bank of America, N.A., ("Bank of America") and Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S" or "Merrill"), a registered broker-dealer, registered investment adviser and a wholly owned subsidiary of Bank of America Corporation ("BofA Corp.").
Merrill makes available certain investment products sponsored, managed, distributed or provided by companies that are affiliates of BofA Corp. MLPF&S is a registered broker-dealer, registered investment adviser, Member SIPC and a wholly owned subsidiary of BofA Corp.
Merrill Private Wealth Management is a division of MLPF&S that offers a broad array of personalized wealth management products and services. Both brokerage and investment advisory services (including financial planning) are offered by the Private Wealth Advisors through MLPF&S. The nature and degree of advice and assistance provided, the fees charged, and client rights and Merrill's obligations will differ among these services. Investments involve risk, including the possible lo ss of principal investment.
The banking, credit and trust services sold by the Private Wealth Advisors are offered by licensed banks and trust companies, including Bank of America, N.A., Member FDIC and other affiliated banks.
Bank of America Private Bank is a division of Bank of America, N.A., Member FDIC and a wholly owned subsidiary of BofA Corp. Trust and fiduciary services are provided by wholly owned banking affiliates of BofA Corp., including Bank of America, N.A.
Investment products:
Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value
© 2024 Bank of America Corporation. All rights reserved. 7201311 - 10/2024
[End of transcript]
[-] Close transcript

Diversification  video

Length 01:56
[Marci McGregor speaks throughout]
On screen disclosure: Please read important information at the end of this program. Recorded on 2/29/2024.
You've probably heard the saying, "don't put all your eggs in one basket." And it's smart advice when it comes to investing.
[Animated speech bubbles appear containing the following financial terms]
On-screen copy:
Bond Ladder
Dividend Yield
P/E Ratio
Asset Allocation
Alternative Investments
Diversification
Total Return
Yield Curve
Market Breadth
Soft Landing
Net Asset Value
Huh?!
What?!
Translation, Please!™
P/E Ratio
[Screen focuses on the word "Diversification"]
On screen copy:
Marci McGregor
Head of Portfolio Strategy, Chief Investment Office
Merrill and Bank of America Private Bank.
It's known as diversification and it means including a variety of investments in your portfolio. Both across and within different asset classes, like stocks, bonds and cash.
[As Marci speaks, three baskets appear labelled "Stocks", "Bonds" and "Cash"]
The idea is: the broader the range of investments you hold, the more you can balance out the market's ups and downs over time.
On screen copy:
The broader your investments
The more you can balance out the market's ups & downs
[Three eggs fall in each basket]
That's because each type of investment can behave differently in different market environments.
[The eggs dance around inside each basket in different ways. Marci appears back on screen]
By being well diversified, you could potentially receive some portfolio stability when markets are volatile, while also pursuing long-term growth.
On screen copy:
Diversification = potential stability & long-term growth
Diversification can take different forms.
[The Stocks basket appears. As Marci speaks, the different sectors and emerging markets are written on screen in a list, next to the basket]
On screen copy:
Different types of sectors
  • Technology
  • Healthcare
  • Consumer
On screen copy:
Different types of bonds
  • U.S. Treasuries
  • Corporate
  • Municipal
If you hold bonds, you could consider U.S. Treasuries, and also high-quality corporate or municipal securities. The goal is to spread out your investments so you're not too heavily weighted in any one area.
[Eggs move between the three different baskets]
On screen copy:
Everyone is different
  • Goals
  • Time horizon
  • Liquidity needs
  • Risk tolerance
Remember, everybody's situation is different. The specific mix of investment you decide on will depend on your goals, time horizon, your liquidity needs and your tolerance for risk.
On screen copy: Diversification
And that's what we mean when we talk about diversification! Thanks for watching and stay tuned for more "Translation, Please."
On screen disclosures:
Important Disclosures
The opinions expressed are as of 2/29/2024 and are subject to change.
Investing involves risk, including the possible loss of principal. Past performance is no guarantee of future results.
Asset allocation, diversification and rebalancing do not ensure a profit or protect against loss in declining markets.
Investments have varying degrees of risk. Some of the risks involved with equity securities include the possibility that the value of the stocks may fluctuate in response to events specific to the companies or markets, as well as economic, political or social events in the U.S. or abroad. Investing in fixed-income securities may involve certain risks, including the credit quality of individual issuers, possible prepayments, market or economic developments and yields and share price fluctuations due to changes in interest rates. Bonds are subject to interest rate, inflation and credit risks. Municipal securities can be significantly affected by political changes as well as uncertainties in the municipal market related to taxation, legislative changes, or the rights of municipal security holders. Income from investing in municipal bonds is generally exempt from federal and state taxes for residents of the issuing state. While the interest income is tax-exempt, any capital gains distributed are taxable to the investor. Income for some investors may be subject to the Federal Alternative Minimum Tax. Treasury bills are less volatile than longer-term fixed income securities and are guaranteed as to timely payment of principal and interest by the U.S. government. Investments in foreign securities (including ADRs) involve special risks, including foreign currency risk and the possibility of substantial volatility due to adverse political, economic or other developments. These risks are magnified for investments made in emerging markets. Investments in a certain industry or sector may pose additional risk due to lack of diversification and sector concentration.
This information should not be construed as investment advice and is subject to change. It is provided for informational purposes only and is not intended to be either a specific offer by Bank of America, Merrill or any affiliate to sell or provide, or a specific invitation for a consumer to apply for, any particular retail financial product or service that may be available.
The Chief Investment Office (CIO) provides thought leadership on wealth management, investment strategy and global markets; portfolio management solutions; due diligence; and solutions oversight and data analytics. CIO viewpoints are developed for Bank of America Private Bank, a division of Bank of America, N.A., ("Bank of America") and Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S" or "Merrill"), a registered broker-dealer, registered investment adviser and a wholly owned subsidiary of Bank of America Corporation ("BofA Corp.").
Merrill makes available certain investment products sponsored, managed, distributed or provided by companies that are affiliates of BofA Corp. MLPF&S is a registered broker-dealer, registered investment adviser, Member SIPC and a wholly owned subsidiary of BofA Corp.
Merrill Private Wealth Management is a division of MLPF&S that offers a broad array of personalized wealth management products and services. Both brokerage and investment advisory services (including financial planning) are offered by the Private Wealth Advisors through MLPF&S. The nature and degree of advice and assistance provided, the fees charged, and client rights and Merrill's obligations will differ among these services. Investments involve risk, including the possible loss of principal investment.
The banking, credit and trust services sold by the Private Wealth Advisors are offered by licensed banks and trust companies, including Bank of America, N.A., Member FDIC and other affiliated banks.
Bank of America Private Bank is a division of Bank of America, N.A., Member FDIC and a wholly owned subsidiary of BofA Corp. Trust and fiduciary services are provided by wholly owned banking affiliates of BofA Corp., including Bank of America, N.A.
Investment products:
Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value
© 2024 Bank of America Corporation. All rights reserved. . 6519063 - 05/2024
[End of transcript]
[-] Close transcript

Asset allocation  video

Length 02:23
[Music in background]
On screen disclosure: Please read important information at the end of this program. Recorded on 03/05/2024.
On screen copy: Asset Allocation.
[Vineet Budhraja speaking throughout video.]
Asset Allocation. Think of it as your personal investing recipe, or the blueprint for your portfolio.
[Animated speech bubbles containing the following financial terms.]
On-screen copy:
Bond Ladder
Dividend Yield
P/E Ratio
Asset Allocation
Alternative Investments
Diversification
Total Return
Yield Curve
Market Breadth
Soft Landing
Net Asset Value
Huh?!
What?!
Translation, Please!™
P/E Ratio
Asset Allocation
Your asset allocation basically refers to the mix of investments you select to help you pursue your financial goals.
On screen copy:
Asset Allocation
Vineet Budhraja
Head of Multi-Asset Portfolios, Chief Investment Office
Merrill and Bank of America Private Bank.
You generally have three asset classes to choose from: Stocks, bonds and cash.
[Icons for stocks, bonds and cash appear on screen.]
On screen copy:
Cash. Doesn't offer much growth. Great for major purchases or emergencies. Includes "cash alternatives," such as CDs & money market funds.
[The cash icon appears. As Vineet speaks, each phrase appears on screen in a bullet pointed list.]
On screen copy:
Cash. Doesn't offer much growth. Great for major purchases or emergencies. Includes "cash alternatives," such as CDs & money market funds.
Cash generally doesn't offer a lot of growth. But if you anticipate needing access to funds say for a major purchase or emergencies, you'll want a certain portion of your portfolio in cash — or what's called "cash alternatives," such as CDs or money market funds.
[The stocks icon appears. As Vineet speaks each phrase appears on screen in a bullet pointed list.]
On screen copy:
Stocks. Highest potential for longer-term growth. Can experience price swings. Consider a smaller amount, depending on your comfort with risk. Still important for pursuing long-term growth.
Stocks have the highest potential for longer-term growth — think years or even decades. But they can experience sharp price swings, especially in the short term. If you aren't comfortable with a lot of risk, you could consider owning a "smaller slice" of them in your portfolio. But remember stocks are still important if your goal is to pursue long-term growth.
[The bonds icon appears. Once again, As Vineet speaks each phrase appears on screen in a bullet pointed list.]
On screen copy: Bonds. Don't offer as much growth potential as stocks. But offer regular income payments. Portfolio diversification. Income you don't need today... you can reinvest for tomorrow.
Bonds typically don't offer as much growth potential as stocks, but can offer you regular income payments, as well as provide an important source of portfolio diversification. And if you don't need the income today, you can reinvest it for added growth potential over time.
Here's how they work together:
[An image of a pie appears, divided into 3 slices labelled stocks, bonds and cash.]
On screen copy:
Stocks. Bonds. Cash.
Imagine your portfolio as a pie, cut into three different-sized slices.
[As Vineet mentions the percentage difference of each slice, the slices get bigger and smaller.]
On screen copy:
Financial goals. Comfort with risk. Time horizon. Cash needs.
Because each asset class comes with a different level of risk, as well as certain other characteristics, by selecting the percent of each you want to own, you can design a portfolio that matches your goals, risk tolerance, time horizon and your liquidity, or cash, needs.
Keep in mind, a well-balanced portfolio contains a mix of all three asset classes.
On screen copy:
For a well-balanced portfolio... include a mix of all 3 asset classes.
Because stocks, bonds and cash respond differently in different market conditions, having a certain percentage of each in your portfolio provides important diversification and can help to limit losses in down markets.
On screen copy:
Don't "set it and forget it"
On screen copy: Stocks. Bonds. Cash.
As your goals and life situation change, your mixture of stocks, bonds and cash will likely need to change as well.
On screen copy: Revisit at least once a year.
Consider revisiting your asset allocation at least once a year.
On screen copy: Asset Allocation.
And there you have it: Asset Allocation! Thanks for watching and stay tuned for more Translation, Please videos.
On screen disclosures:
Important Disclosures
The opinions expressed are as of 3/04/2024 and are subject to change.
Investing involves risk, including the possible loss of principal. Past performance is no guarantee of future results.
Asset allocation, diversification and rebalancing do not ensure a profit or protect against loss in declining markets.
Investments have varying degrees of risk. Some of the risks involved with equity securities include the possibility that the value of the stocks may fluctuate in response to events specific to the companies or markets, as well as economic, political or social events in the U.S. or abroad. Investing in fixed-income securities may involve certain risks, including the credit quality of individual issuers, possible prepayments, market or economic developments and yields and share price fluctuations due to changes in interest rates. Bonds are subject to interest rate, inflation and credit risks.
This information should not be construed as investment advice and is subject to change. It is provided for informational purposes only and is not intended to be either a specific offer by Bank of America, Merrill or any affiliate to sell or provide, or a specific invitation for a consumer to apply for, any particular retail financial product or service that may be available.
The Chief Investment Office (CIO) provides thought leadership on wealth management, investment strategy and global markets; portfolio management solutions; due diligence; and solutions oversight and data analytics. CIO viewpoints are developed for Bank of America Private Bank, a division of Bank of America, N.A., ("Bank of America") and Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S" or "Merrill"), a registered broker-dealer, registered investment adviser and a wholly owned subsidiary of Bank of America Corporation ("BofA Corp.").
Merrill makes available certain investment products sponsored, managed, distributed or provided by companies that are affiliates of BofA Corp. MLPF&S is a registered broker-dealer, registered investment adviser, Member SIPC and a wholly owned subsidiary of BofA Corp.
Merrill Private Wealth Management is a division of MLPF&S that offers a broad array of personalized wealth management products and services. Both brokerage and investment advisory services (including financial planning) are offered by the Private Wealth Advisors through MLPF&S. The nature and degree of advice and assistance provided, the fees charged, and client rights and Merrill's obligations will differ among these services. Investments involve risk, including the possible loss of principal investment.
The banking, credit and trust services sold by the Private Wealth Advisors are offered by licensed banks and trust companies, including Bank of America, N.A., Member FDIC and other affiliated banks.
Bank of America Private Bank is a division of Bank of America, N.A., Member FDIC and a wholly owned subsidiary of BofA Corp. Trust and fiduciary services are provided by wholly owned banking affiliates of BofA Corp., including Bank of America, N.A.
Investment products:
Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value
© 2024 Bank of America Corporation. All rights reserved. 6518935 - 04/2024
[End of transcript]
[-] Close transcript

Asset classes  video

Length 02:16
[Marci McGregor speaks throughout]
On screen disclosure: Please read important information at the end of this program. Recorded on 2/29/2024.
On screen copy: Asset Classes
Asset Classes: What are they? Don't worry, you don't have to go back to school for this.
[Animated speech bubbles appear containing the following financial terms]
On-screen copy:
Bond Ladder
Dividend Yield
P/E Ratio
Asset Allocation
Alternative Investments
Diversification
Total Return
Yield Curve
Market Breadth
Soft Landing
Net Asset Value
Huh?!
What?!
Translation, Please!™
P/E Ratio
[Screen focuses on the words "Asset Classes"]
On screen copy:
Asset Classes
Marci McGregor
Head of Portfolio Strategy, Chief Investment Office
Merrill and Bank of America Private Bank
Asset classes are groups of investments that share certain behaviors and characteristics. For most investors, there are three main types to know about:
[As Marci speaks, each term and its definition appears on screen]
  • Stocks, also known as equities.
  • Bonds, also known as fixed income.
  • And cash, which can include money market funds and CDs.
On screen copy:
Stocks - Equities
Bonds - Fixed income
Cash - Money market funds & CDs
They all have their own unique risks and potential benefits, and holding some combination of all three is important in a well-rounded portfolio.
On screen copy:
Some combination of all 3 is important
Think of it like a pie cut into three slices.
[A pie chart with three equal segments is shown. The segments are labelled "Stocks", "Bonds" and "Cash". As Marci describes each term, the pie chart rotates and the term being described is emphasized in red at the top of the screen]
Stocks give you a piece of ownership, or shares in a company, and their value can go up or down based on a company's performance, along with other factors. In general, stocks tend to be riskier than bonds or cash in the short-term, but can offer greater growth potential in the long term.
On screen copy:
Stocks
Riskier in the short term...
But offer greater growth potential in the long term
Bonds give you a piece of ownership in a loan, which can be issued by a government or corporation. As a "bondholder" you typically receive regular interest payments in return. Bonds are also generally less risky than stocks and can offer some stability when the stock market is volatile.
On screen copy:
Bonds
Generally less risky than stocks...
And can offer stability
Holding some cash in your portfolio is important for unexpected expenses and can offer stability of principal. But cash doesn't offer much growth over time, especially when prices are rising. So, it would typically make up the smallest slice of the pie.
On screen copy:
Cash
Important for unexpected expenses...
But doesn't offer much growth over time
[The pie chart segment labelled "Cash" shrinks, while the "Stocks" and "Bonds" segments grow larger to compensate]
There are other types of asset classes, such as Real estate and Commodities, like gold, and also Alternative investments for qualified investors.
[The terms "Real Estate", "Commodities, like gold" and "Alternative investments" appear in a list, next to diagrams of houses, gold blocks, and a pie chart respectively]
On screen copy:
Have their own risks...
& potential benefits
As with stocks, bonds and cash, they also have their own risks and potential benefits to consider before investing.
And that's your quick tutorial on asset classes.
On screen copy:
Asset Classes
Thanks for watching and stay tuned for more "Translation, Please" videos.
On screen disclosures:
Important Disclosures
The opinions expressed are as of 2/29/2024 and are subject to change.
Investing involves risk, including the possible loss of principal. Past performance is no guarantee of future results.
Asset allocation, diversification and rebalancing do not ensure a profit or protect against loss in declining markets.
Alternative investments are intended for qualified investors only. Some or all alternative investment programs may not be in the best interest of certain investors. No assurance can be given that any alternative investment's investment objectives will be achieved.
Investments have varying degrees of risk. Some of the risks involved with equity securities include the possibility that the value of the stocks may fluctuate in response to events specific to the companies or markets, as well as economic, political or social events in the U.S. or abroad. Investing in fixed-income securities may involve certain risks, including the credit quality of individual issuers, possible prepayments, market or economic developments and yields and share price fluctuations due to changes in interest rates. Bonds are subject to interest rate, inflation and credit risks. There are special risks associated with an investment in commodities, including market price fluctuations, regulatory changes, interest rate changes, credit risk, economic changes and the impact of adverse political or financial factors..
This information should not be construed as investment advice and is subject to change. It is provided for informational purposes only and is not intended to be either a specific offer by Bank of America, Merrill or any affiliate to sell or provide, or a specific invitation for a consumer to apply for, any particular retail financial product or service that may be available.
The Chief Investment Office (CIO) provides thought leadership on wealth management, investment strategy and global markets; portfolio management solutions; due diligence; and solutions oversight and data analytics. CIO viewpoints are developed for Bank of America Private Bank, a division of Bank of America, N.A., ("Bank of America") and Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S" or "Merrill"), a registered broker-dealer, registered investment adviser and a wholly owned subsidiary of Bank of America Corporation ("BofA Corp.").
Merrill makes available certain investment products sponsored, managed, distributed or provided by companies that are affiliates of BofA Corp. MLPF&S is a registered broker-dealer, registered investment adviser, Member SIPC and a wholly owned subsidiary of BofA Corp.
Merrill Private Wealth Management is a division of MLPF&S that offers a broad array of personalized wealth management products and services. Both brokerage and investment advisory services (including financial planning) are offered by the Private Wealth Advisors through MLPF&S. The nature and degree of advice and assistance provided, the fees charged, and client rights and Merrill's obligations will differ among these services. Investments involve risk, including the possible loss of principal investment.
The banking, credit and trust services sold by the Private Wealth Advisors are offered by licensed banks and trust companies, including Bank of America, N.A., Member FDIC and other affiliated banks.
Bank of America Private Bank is a division of Bank of America, N.A., Member FDIC and a wholly owned subsidiary of BofA Corp. Trust and fiduciary services are provided by wholly owned banking affiliates of BofA Corp., including Bank of America, N.A.
Investment products:
Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value
© 2024 Bank of America Corporation. All rights reserved. 6519044 - 05/2024
[End of transcript]
[-] Close transcript

P/E Ratio  video

Length 01:25
[Music in background]
On screen disclosure:
Please read important information at the end of this program. Recorded on 12/19/2023
[Emily Avioli speaks throughout video]
If fractions aren't your thing, you might not be familiar with the term, Price-to-Earnings Ratio, or P/E Ratio.
On screen copy:
P/E Ratio
[Animated speech bubbles containing the following financial terms.]
On-screen copy:
Bond Ladder
Dividend Yield
P/E Ratio
Asset Allocation
Alternative Investments
Diversification
Total Return
Yield Curve
Market Breadth
Soft Landing
Net Asset Value
Huh?! What?!
Translation, Please!™
P/E Ratio
It's important to know about, as it's a widely used way to think about the value of an individual stock.
On screen copy:
Emily Avioli
Investment Strategist, Chief Investment Office
Merrill and Bank of America Private Bank
It's also easy to calculate and works with any publicly traded company. So, let's 'do the math':
[Emily points her thumb to behind her.]
Take a company's current price per share and divide it by its latest earnings per share and you get its current P/E Ratio.
On-screen copy:
Price per share / Earnings per share = P/E Ratio
For example, if company X is trading at $100 per share and its earning are $5 per share, it has a P/E Ratio of 20.
On-screen copy:
Company X $100 per share / $5 per share = P/E Ratio = 20
Analysts and investors use this number to determine if a company share price is potentially overvalued or undervalued relative to its earnings.
On-screen copy:
Company X P/E Ratio
A high P/E Ratio could mean that a company's stock price is overvalued while the reverse is true for a low P/E Ratio.
[Overvalued P/E Ratio on screen moves up a bar from zero, while the undervalued P/E Ratio moves down the bar to zero]
On-screen copy:
Overvalued P/E Ratio
P/E Ratio Undervalued
Investors use this number to compare one company's stock price to other companies in the same sector say, information technology, and also to broader market indices, like the S&P 500.
On-screen copy:
P/E Ratios On screen copy: ($$$) Tech Company X, ($$$) Tech Company Y, ($$$) Tech Company Z, ($$$$$$) S&P 500
[X, Y and Z Companies move around the P/E Ratio in a circular motion. The number of dollar signs next to each company fluctuates up and down]
Keep in mind, P/E Ratios fluctuate along with daily changes in a company's stock price and also when its earning changed.
Also, while P/E Ratios are a useful snapshot of a company's value, they're just one factor to consider before deciding to invest.
And that's P/E Ratio translated.
On-screen copy: P/E Ratio
Thanks, and stay tuned for more Translation, please.
On screen disclosures:
Important Disclosures
The opinions expressed are as of 12/19/2023 and are subject to change.
Investing involves risk, including the possible loss of principal. Past performance is no guarantee of future results.
This information should not be construed as investment advice and is subject to change. It is provided for informational purposes only and is not intended to be either a specific offer by Bank of America, Merrill or any affiliate to sell or provide, or a specific invitation for a consumer to apply for, any particular retail financial product or service that may be available.
The Chief Investment Office (CIO) provides thought leadership on wealth management, investment strategy and global markets; portfolio management solutions; due diligence; and solutions oversight and data analytics. CIO viewpoints are developed for Bank of America Private Bank, a division of Bank of America, N.A., ("Bank of America") and Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S" or "Merrill"), a registered broker-dealer, registered investment adviser and a wholly owned subsidiary of Bank of America Corporation ("BofA Corp.").
Merrill makes available certain investment products sponsored, managed, distributed or provided by companies that are affiliates of BofA Corp. MLPF&S is a registered broker-dealer, registered investment adviser, Member SIPC and a wholly owned subsidiary of BofA Corp.
Merrill Private Wealth Management is a division of MLPF&S that offers a broad array of personalized wealth management products and services. Both brokerage and investment advisory services (including financial planning) are offered by the Private Wealth Advisors through MLPF&S. The nature and degree of advice and assistance provided, the fees charged, and client rights and Merrill's obligations will differ among these services. Investments involve risk, including the possible loss of principal investment.
The banking, credit and trust services sold by the Private Wealth Advisors are offered by licensed banks and trust companies, including Bank of America, N.A., Member FDIC and other affiliated banks.
Bank of America Private Bank is a division of Bank of America, N.A., Member FDIC and a wholly owned subsidiary of BofA Corp. Trust and fiduciary services are provided by wholly owned banking affiliates of BofA Corp., including Bank of America, N.A.
Investment products:
Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value
© 2024 Bank of America Corporation. All rights reserved. 6287205- 01/2024
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Yield Curve  video

Length 01:52
[Music in background]
On screen disclosure: Please read important information at the end of this program. Recorded on 9/18/2023
[Kirsten Cabacungan speaks throughout video]
Yield curve. Sounds like a sign you might see driving down a scary mountain road, doesn't it?
On screen copy: Yield Curve
[Animated speech bubbles containing the following financial terms.]
On-screen copy:
Bond Ladder
Dividend Yield
P/E Ratio
Asset Allocation
Alternative Investments
Diversification
Total Return
Yield Curve
Market Breadth
Soft Landing
Net Asset Value
Huh?!
What?!
Translation, Please!™
P/E Ratio
On screen copy:
Kirsten Cabacungan
Investment Strategist, Chief Investment Office
Merrill and Bank of America Private Bank
Here's what it really means. The yield curve describes the relationship between interest rates or yields on bonds and time to maturity.
[A percentage sign appears with the word Interest underneath. An icon of a clock appears with the word 'Maturity' underneath .]
And typically, we're talking about US Treasury Bonds.
On screen copy:
US Treasury Bonds
On screen copy:
'Yield Curve' 'for illustration only'
[Graph shown where the Y axis represents 'Interest' from 1% to 7%+ while the X axis represents 'Year's', from 1 to 30.]
[There is a curve line on the graph that is lower on the lefts side of the graph and is higher on the right side. A round marker representing different bonds moves along the curve starting at 1.5 years-1.5% interest. On screen text reads: Short/Front End. An arrow follows the marker as it slides to 30+years-5% interest.]
On screen copy:
Long/Back End.
[The marker then slides to 18 years-4.5% interest.]
On screen copy:
Normal Curve
Here's how it works. Bonds with short maturities fall in the short end or front end of the yield curve, while bonds with longer maturities, like 10 to 30 years, fall in the long end or back end of the curve.
And in most market environments, yields increase as maturities increase. That's when you have a normal curve.
[Graph showing the solid curved line straightening across the X axis at the 4% interest line to illustrate a Flat Curve.]
On screen copy: Flat Curve
[Graph changes to show the left side of the curve higher than the right side to illustrate an Inverted Curve.]
On screen copy:
Inverted Curve
There's also a flat curve, then an inverted curve when rates on the short end go higher than rates on the long end.
And why is this important? Well, investors use the curve to compare interest rates across bonds of different maturities with similar credit quality, plus the different shapes can signal different things about the economy. A normal curve often means economic expansion. A flat curve could be a sign of slowing growth, while an inverted curve has historically been a signal that recession is ahead.
On screen copy:
Where's the Economy Headed?
[A graph with a normal curve appears illustrating Economic Expansion.]
On screen copy:
Economic Expansion
[A graph with a flat curve appears to show slowing growth.]
On screen copy:
Slowing Growth
[A graph with an inverted curve appears indicating a possible recession.]
On screen copy: Recession Ahead
And that's the yield curve in a nutshell. Thanks for watching and stay tuned for more Translation, Please! videos.
On screen disclosures:
Important Disclosures
The opinions expressed are as of 9/18/2023 and are subject to change.
Investing involves risk, including the possible loss of principal. Past performance is no guarantee of future results.
Bonds are subject to interest rate, inflation and credit risks. When interest rates go up, bond prices typically drop, and vice versa.
This information should not be construed as investment advice and is subject to change. It is provided for informational purposes only and is not intended to be either a specific offer by Bank of America, Merrill or any affiliate to sell or provide, or a specific invitation for a consumer to apply for, any particular retail financial product or service that may be available.
The Chief Investment Office (CIO) provides thought leadership on wealth management, investment strategy and global markets; portfolio management solutions; due diligence; and solutions oversight and data analytics. CIO viewpoints are developed for Bank of America Private Bank, a division of Bank of America, N.A., ("Bank of America") and Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S" or "Merrill"), a registered broker-dealer, registered investment adviser and a wholly owned subsidiary of Bank of America Corporation ("BofA Corp.").
Merrill makes available certain investment products sponsored, managed, distributed or provided by companies that are affiliates of BofA Corp. MLPF&S is a registered broker-dealer, registered investment adviser, Member SIPC and a wholly owned subsidiary of BofA Corp.
Merrill Private Wealth Management is a division of MLPF&S that offers a broad array of personalized wealth management products and services. Both brokerage and investment advisory services (including financial planning) are offered by the Private Wealth Advisors through MLPF&S. The nature and degree of advice and assistance provided, the fees charged, and client rights and Merrill's obligations will differ among these services. Investments involve risk, including the possible loss of principal investment.
The banking, credit and trust services sold by the Private Wealth Advisors are offered by licensed banks and trust companies, including Bank of America, N.A., Member FDIC and other affiliated banks.
Bank of America Private Bank is a division of Bank of America, N.A., Member FDIC and a wholly owned subsidiary of BofA Corp. Trust and fiduciary services are provided by wholly owned banking affiliates of BofA Corp., including Bank of America, N.A.
Investment products:
Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value
© 2024 Bank of America Corporation. All rights reserved. 6420545 - 2/2024
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