1. O N YOUR OWN SHEET OF PAPER – F ILL IN THE CHART CompanyPrice Per Share No. of Shares Owned Amount Invested New Price per share 1 Year Later American Cellular $5 Big Box Stores $20 Biotech Industries $10 General Grocery $20 Giant Auto$10 Gold Mining Group $5 Total Value

2. O NE YEAR LATER American Cellular stock – $8 Big Box Stores- $23 Biotech Industries - $ 8 General Grocery - $22 Giant Auto - $ 11 Gold Mining Company- $4

3. Q UESTIONS !!!! A NSWER ON THE BACK ! 1. Did the price per share of the investment club increase or decrease? 2. What do you think determined whether the price per share of the investment club increased or decreased? 3. If you had a real investment club and bought stock, what would you do to increase the value of investments one year later? 4. Assume that more students want to join your investment club and purchase shares. What price would you charge them? Why?

4. S TANDARD SSEPF2c- Give examples of risk and return SSEPF2d- Evaluate a variety of savings and investment options

5. I NVESTMENT When a person invests money, they are taking a risk and hoping to make money in the long run.

6. R ISK VS. R ETURN Risk: the chance the investment might actually end up losing money rather than making it Return: the eventual payoff of the investment RiskReturnRiskReturn

7. T YPES OF I NVESTMENTS Certificate of deposit (CD’s): loans investors make to Financial institutions Instant access carries a penalty Low interest rates but very safe

8. T YPES OF I NVESTMENTS Bonds: a loan to the government or a company Higher return offered than with CD’s Low risk through the government; have a higher risk through a corporation

9. T YPES OF I NVESTMENTS Stock: part ownership in a corporation Can be very risky, but can also receive high returns Bear Market= stock market falling Bull Market= stock market is increasing

10. T YPES OF I NVESTMENTS Real estate: buying, selling, and managing properties Very Risky but can also have a huge return

11. T YPES OF I NVESTMENTS Mutual fund: pool money from a number of investors to buy a range of stocks Investors to avoid the risk that comes from owning any one asset. In other words, mutual funds make it easy to diversify.

12. THE PYRAMID OF RISKS AND R ETURN Highest Risk — Highest Potential Return or Loss Stocks and Real Estate Bonds Certificates of Deposits Savings Accounts

13. T HREE R ULES FOR BUILDING W EALTH 1. Start early. Give money time to grow.

14. T HREE R ULES FOR BUILDING W EALTH 2. Buy and hold. Keep your money invested.

15. T HREE R ULES FOR BUILDING W EALTH 3. Diversify. Don’t put all your eggs in one basket. One Stock Stocks Savings Bonds Bank CD’s

16. THE STOCK-MARKET ROLLER COASTER If you buy and sell on the ups and downs, you may lose money. But if you hold on for the long term, the ups are greater than the downs.