Personal Personal FinanceFinance

Chapter 7Chapter 7

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• Kinds of stocks– Common - voting

– Preferred - safer

Investment OptionsStocks

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• Profit from stocks– Dividends

– Capital gain / loss

Investment OptionsStocks

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• Stock markets– New York Stock Exchange (NYSE)

– NASDAQ (tech stocks)

Investment OptionsStocks

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• Stock market newspaper listing

Investment OptionsStocks

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• Evaluating stocks– Blue-chip

– Dow Jones

– Bull market

– Bear market

– S&P 500

– Fortune 500

Investment OptionsStocks

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• Commodities– Futures (contract)

– Options (rights)

• Penny stock

Investment OptionsHigh-Risk Investments

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What do we call a stock that is considered a safe investment in a large corporation?

A. Red-hot stock

B. Blue-chip stock

C. Bear stock

D. Dividend stock

E. NASDAQ

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What do we call a stock that is considered a safe investment in a large corporation?

A. Red-hot stock

B. Blue-chip stock

C. Bear stock

D. Dividend stock

E. NASDAQ

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• IOUs– Corporate

– Municipal / state

– Federal• Savings

• Treasury (bonds, notes, and bills)

Investment OptionsBonds and Securities

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• Pool money / shared risk– Portfolio

– Diversify

Investment OptionsMutual Funds

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• Load v. no-load funds

• Index funds

Investment OptionsMutual Funds

• Sheila and Bob – start at different ages

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Investment OptionsTime Value of Money

• Real estate

• Collectibles

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Investment OptionsOther Kinds

What do you think?Discussion

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• How is the real estate market lately? Is it a good investment today?

• Do you collect valuables? Why?

• What kinds of collectibles provide the best chance of long-term success? Why?

• Should investments be evaluated on short-term or long-term results? Why?

• Retirement

• Estate

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Investment OptionsPlanning

• Start planning now!

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Investment OptionsPlanning

• Sources of retirement income– Social Security (supplemental)

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Investment OptionsRetirement

• Sources of retirement income– Social Security (supplemental)

– Company-sponsored• Pension

• Profit-sharing / stock-bonus

• 401(k) / 403(b) plan

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Investment OptionsRetirement

• Sources of retirement income– Social Security (supplemental)

– Company-sponsored

– Other• IRA

• Roth IRA

• SEP-IRA

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Investment OptionsRetirement

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When should you start planning for retirement?

A. When you are in your 60s

B. When you are in your 50s

C. When you are in your 40s

D. When you are in your 30s

E. Right now

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When should you start planning for retirement?

A. When you are in your 60s

B. When you are in your 50s

C. When you are in your 40s

D. When you are in your 30s

E. Right now

• Broker

• Financial adviser

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InvestmentBrokers, Advisers, and Planners

• Research a company– Newspapers

– Online sources

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InvestmentGetting Started

• Online trading – High-risk

– Fees per transaction

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InvestmentGetting Started

What do you think?Discussion

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• Will you be able to live on Social Security when you retire? Explain.

• How can you get additional income for retirement?

• Are investments for the rich only?

• How might you start investing now?

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