IF I ASKED YOU TO LEND ME SOME MONEY SO I COULD START A BUSINESS, WOULD YOUR MONEY BE AT RISK? WHY MIGHT YOU BE WILLING TO TAKE THE RISK OR NOT TAKE THE RISK?
SAVING FOR SHORT TERM GOALS Best done with a savings account Short term goals include…
SAVING FOR LONG TERM GOALS Best done with some form of investment Long term goals include…
THE DIFFERENCE BETWEEN SAVING & INVESTING Investing involves RISK. You may make more money than in a savings account, but you can lose it too.
TYPES OF INVESTMENT: Stocks Bonds Real Estate It’s important to research your investments before you buy.
STOCKS Purchasing stocks means you’re purchasing a portion, or share, of the company Owning a share means you have part ownership of the company Share prices depend on a variety of factors including past performance and reputation, government policies and world events
STOCKS CONT’D Individuals try to buy stock they believe will go up over time If the price goes up = opportunity to sell and gain money If price goes down = investors lose money
SOME COMPANIES PAY A DIVIDEND (A PORTION OF THEIR PROFIT) TO INVESTORS ON A REGULAR BASIS.
Dividend – Part of a companies profits paid to share holders Stock Symbol – An abbreviation of the company name Last – the most current share price of the stock CHG – change in share price from the day before
WHAT IS NASDAQ & THE DOW JONES? NASDAQ – World’s largest electronic stock market trading shares from a number of different industries Dow Jones – industrial publisher that tracks the stock performance of the top 30 U.S. companies If NASDAQ/Dow Jones is UP = stock prices generally are up If NASDAQ/Dow Jones is DOWN = stock price generally are down
WHAT IF YOU DON’T HAVE TIME TO WATCH STOCKS? You can use MUTUAL FUNDS!!! Mutual funds allow you to become an investor in a number of different companies You become a part of a group of people who pool their money together and pay a professional investment manager to buy stocks You spread the risk – you might lose in one company, but gain in another NOT ALL MUTUAL FUNDS MAKE GAINS!!!