1. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 19 SLIDE 1 19-1 19-1Saving and Investment Planning 19-2 19-2Stock Investments 19-3 19-3Bonds and Mutual Funds 19-4 19-4Real Estate Investments 19-5 19-5Other Investments 19 C H A P T E R Savings and Investment Strategies

2. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 19 SLIDE 2 SAVING AND INVESTMENT BASICS ●Savings and investment activities ●Determine investment goals ●The growth of savings ●Interest ●Compound interest

3. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 19 SLIDE 3 SAVING AND INVESTMENT CHOICES ●Savings plans ●Savings account ●Certificate of deposit ●Money market account ●Securities ●Stock investments ●Bond investments ●Mutual funds ●Alternative investments ●Real estate ●Commodities ●Collectibles

4. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 19 SLIDE 4 EVALUATING SAVINGS AND INVESTMENTS ●Safety and risk ●Potential return ●Liquidity ●Taxes

5. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 19 SLIDE 5 INVESTMENT PYRAMID

6. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 19 SLIDE 6 TYPES OF STOCK ●Preferred stock ●Common stock

7. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 19 SLIDE 7 STOCK TRANSACTIONS ●Using a stockbroker ●Online investing ●Stock exchanges ●Changing stock values

8. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 19 SLIDE 8 STOCK MARKET PRICE REPORT

9. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 19 SLIDE 9 Checkpoint ●What is the purpose of a stock exchange? ●The purpose of a stock exchange is to accommodate the buying and selling of securities.

10. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 19 SLIDE 10 STOCK SELECTION ●Stock information sources ●Economic factors ●Inflation ●Interest rates ●Consumer spending ●Employment ●Company factors

11. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 19 SLIDE 11 PROCESS FOR DECIDING STOCK PURCHASES 4.Decide whether to buy, sell, or hold the stock of those companies. 3.Identify companies in those industries. 2.Determine industries that will be affected. 1.Observe and analyze economic and social trends.

12. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 19 SLIDE 12 GOVERNMENT BONDS ●Municipal bonds ●U.S. savings bonds ●Other federal securities ●Federal notes (T-notes) ●Treasury bills (T-bills) ●Treasury bonds (T-bonds)

13. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 19 SLIDE 13 CORPORATE BONDS ●Bond components ●Bond values

14. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 19 SLIDE 14 Checkpoint ●What affects the value of a bond? ●The value of a bond is affected by changing interest rates. ●If the bond’s stated rate is lower than interest rates on similar bonds, investors will want to buy the bond for less than its face value. ●If the bond’s stated interest rate is higher than interest rates on similar bonds, the seller of the bond will want to receive more than its face value.

15. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 19 SLIDE 15 MUTUAL FUNDS ●A mutual fund is an investment fund set up and managed by companies that receive money from many investors.

16. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 19 SLIDE 16 TYPES OF MUTUAL FUNDS ●Aggressive-growth stock funds ●Income funds ●International funds ●Sector funds ●Bond funds ●Balanced funds

17. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 19 SLIDE 17 MUTUAL FUND VALUES ●Shares of the mutual fund ●Value of each share ●Net asset value (NAV) ●Operating expenses ●Earnings

18. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 19 SLIDE 18 SELECTING HOUSING ●Renting your residence ●Owning a mobile home ●Buying a home ●Services of real estate agents ●Other real estate professionals ●Buying a condominium

19. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 19 SLIDE 19 BENEFITS OF HOME OWNERSHIP ●Tax benefits ●Increased equity ●Pride of ownership

20. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 19 SLIDE 20 COSTS OF HOME OWNERSHIP ●Property taxes ●Interest payments ●Property insurance ●Maintenance

21. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 19 SLIDE 21 COMMODITIES AND FUTURES ●Commodity exchanges ●Agricultural commodities ●Gold, silver, and precious metals ●Currency and financial instruments

22. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 19 SLIDE 22 COLLECTIBLES ●Types of collectibles ●Collectible values