Mr. Stasa- Willoughby-Eastlake City Schools Investing 101 Part 1 Mr. Stasa- Willoughby-Eastlake City Schools

Planning Goals Wisely Short-term goals should be planned using savings Money that is guaranteed to be there Long-term goals should be planned through investments Money that will grow more, but take longer

REVIEW… Financial planning Financial Goals must be S-M-A-R-T Short-term goals Intermediate Goals Long-term goals Financial Goals must be S-M-A-R-T Specific Measurable Attainable Realistic Time-bound

What’s an Investment? An investment is an asset an investor buys in hopes of it being worth more in the future. Investments include (but not limited to): Stocks Bonds Mutual Funds Real Estate Collectibles

Current U.S. Rate of Inflation: Why Invest? Make your money grow! Build your wealth at rates that will exceed inflation (the rise in the level of prices over time) Have a regular source of income Current U.S. Rate of Inflation: 0.8% (As of Dec. 2014)

U.S. Stocks had an average return of 13.8% in 2014 Rates are in your favor The U.S. inflation rate increases on average about 2% per year The average U.S. savings account interest rate is less than 1% The growth of the average U.S. stock has a return of 10% per year A return is an annual rate of growth U.S. Stocks had an average return of 13.8% in 2014 http://www.usinflationcalculator.com/inflation/historical-inflation-rates/

What Would You do? If you were handed $1,000 today, what would you do with it? Let it set under your mattress Place it into a savings account Invest it in stocks?

Purchasing Power Purchasing power the amount of goods (aka investments) you can buy with your money

Why Learn About Stocks? The stock market is the core of America’s economic system Stock is a share of ownership in the assets and earnings of a company Bond is a type of debt that a company issues to investors for a specified amount of time. Stock market is a general term used to describe all transactions involving the buying and selling of stocks and bonds issued by a company

9 Stock Industry Sectors Entertainment Capital Goods Communication Consumer Goods Energy Financial Health Care Technology Transportation

Why Companies Issue Stock When a company would like to grow, it issues stocks to raise funds and pay for ongoing business expenses

Two Types of Investors Growth Investor: Growth investors buy investments that will increase in value over time- selling the investments later for a higher price. Income Investor: Income investors buy investments that provide regular cash payments.