Chapter 11 Investing for Your Future

Stages of Investing b Stage 1 –

Stages of Investing b Stage 2 – b Investing – Beginning investing moves you from a temporary savings to a more permanent statusBeginning investing moves you from a temporary savings to a more permanent status Beginning investments should be _______ and _________.Beginning investments should be _______ and _________. Ex:Ex:

Stages of Investing b Stage 3 – Investing on a regular and planned basis.Investing on a regular and planned basis. Goals are more long termGoals are more long term Usually occurs when earning potential is at a peak (middle age)Usually occurs when earning potential is at a peak (middle age) Often investing for retirementOften investing for retirement Ex:Ex:

Stages of Investing b Stage 4 - Management of investment alternatives to maximize the growth of your portfolio.Management of investment alternatives to maximize the growth of your portfolio. Portfolio –Portfolio – Invest in different types of securities to try to maximize returns (diversification)Invest in different types of securities to try to maximize returns (diversification)

Stages of Investing b Stage 5 -

Reasons to Invest b To beat inflation – b Increase wealth (faster than savings) b Fun and challenging

Risk and Return b Risk – b

Diversification b Diversification – b Diversify based on

Types of Risk b Interest rate risk – b Political risk –

Types of Risk b Market risk – b Company or industry risk –

Criteria for Choosing an Investment b b b b b b

Wise Investment Practices b b b b b b b

Sources of Financial Information b Newspapers b Investor Services b Financial Magazines b Online

Sources of Financial Information b Financial Advisers – b Annual Reports - b Brokers

Investment Options (Low to Medium Risk) b Bonds – b Treasury Securities –

Investment Options (Medium Risk) b Mutual Fund b Stock –

Investment Options (Medium Risk) b Annuity – b Real Estate –

Investment Options (High Risk) b Futures – b Options – b Penny Stocks –