Personal
Finance
Chapter 7
Investment Options
Stocks
• Kinds of stocks
– Common - voting
– Preferred - safer
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Investment Options
Stocks
• Profit from stocks
– Dividends
– Capital gain / loss
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Investment Options
Stocks
• Stock markets
– New York Stock Exchange (NYSE)
– NASDAQ (tech stocks)
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Investment Options
Stocks
• Stock market newspaper listing
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Investment Options
Stocks
• Evaluating stocks
– Blue-chip
– Dow Jones
– Bull market
– Bear market
– S&P 500
– Fortune 500
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Investment Options
High-Risk Investments
• Commodities
– Futures (contract)
– Options (rights)
• Penny stock
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What do we call a stock that is
considered a safe investment in a
large corporation?
A.
B.
C.
D.
E.
Red-hot stock
Blue-chip stock
Bear stock
Dividend stock
NASDAQ
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What do we call a stock that is
considered a safe investment in a
large corporation?
A.
B.
C.
D.
E.
Red-hot stock
Blue-chip stock
Bear stock
Dividend stock
NASDAQ
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Investment Options
Bonds and Securities
• IOUs
– Corporate
– Municipal / state
– Federal
• Savings
• Treasury (bonds, notes, and bills)
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Investment Options
Mutual Funds
• Pool money / shared risk
– Portfolio
– Diversify
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Investment Options
Mutual Funds
• Load v. no-load funds
• Index funds
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Investment Options
Time Value of Money
• Sheila and Bob – start at different ages
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Investment Options
Other Kinds
• Real estate
• Collectibles
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What do you think?
Discussion
• How is the real estate market lately? Is
it a good investment today?
• Do you collect valuables? Why?
• What kinds of collectibles provide the
best chance of long-term success? Why?
• Should investments be evaluated on
short-term or long-term results? Why?
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Investment Options
Planning
• Retirement
• Estate
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Investment Options
Planning
• Start planning now!
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Investment Options
Retirement
• Sources of retirement income
– Social Security (supplemental)
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Investment Options
Retirement
• Sources of retirement income
– Social Security (supplemental)
– Company-sponsored
• Pension
• Profit-sharing / stock-bonus
• 401(k) / 403(b) plan
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Investment Options
Retirement
• Sources of retirement income
– Social Security (supplemental)
– Company-sponsored
– Other
• IRA
• Roth IRA
• SEP-IRA
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When should you start planning for
retirement?
A.
B.
C.
D.
E.
When you are in your 60s
When you are in your 50s
When you are in your 40s
When you are in your 30s
Right now
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When should you start planning for
retirement?
A.
B.
C.
D.
E.
When you are in your 60s
When you are in your 50s
When you are in your 40s
When you are in your 30s
Right now
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Investment
Brokers, Advisers, and Planners
• Broker
• Financial adviser
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Investment
Getting Started
• Research a company
– Newspapers
– Online sources
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Investment
Getting Started
• Online trading
– High-risk
– Fees per transaction
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What do you think?
Discussion
• Will you be able to live on Social
Security when you retire? Explain.
• How can you get additional income for
retirement?
• Are investments for the rich only?
• How might you start investing now?
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