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    whs.wsd.wednet.edu whs.wsd.wednet.edu Presentation Transcript

    • Chapter 11 - Investing for Your Future Part 2: Exploring Investment Options By Scott Feil January 3, 2006
    • Overview
      • Sources of Financial Information
      • Investment Options
    • Sources of Financial Information
      • Newspapers
        • Contain financial pages
        • The Wall Street Journal
        • Barron’s
      • Investor Services and Newsletters
        • Standard and Poor’s Reports
      • Financial Magazines
        • Business Week , Forbes , Money , The Economist , Kiplinger’s Personal Finance
    • Sources, cont.
      • Brokers
        • Full-service brokers
          • Provide opinions and analysis
          • Fidelity, Merrill Lynch, Piper Jaffray
        • Discount brokers
          • Buy and sell only
          • Does not provide advice
          • Charles Schwab, Ameritrade, E*Trade
    • Sources, cont.
      • Financial Advisers
        • Professional investment planners
        • Sell stocks, bonds, insurance, retirement, etc.
      • Annual Reports and Financial Statements
        • Annual Report - A summary of a corporation’s financial results for the year
        • Required by the SEC (Securities and Exchange Commission)
      • Online Investor Education
        • Ex. The Motley Fool
    • Investment Options
      • Low Risk/Low-to-Medium Return
        • Corporate and Municipal Bonds
          • Bonds: Represent money borrowed from an investor
          • Earn a fixed interest
          • Repaid first if company goes broke
        • U.S. Government Savings Bonds
          • Discount bond (Series EE savings bond): buy it for less than its maturity value
          • $50 bond for $25, get $50 in 10 years (maturity)
          • Exempt from taxes
          • Can be cashed for current value at any time
    • Investment Options, cont.
      • Low Risk/Low-to-Medium Returns, cont.
        • Treasury Securities
          • Treasury bills (t-bills): $10,000+, up to 1 year
          • Treasury notes: $2,000-$5,000, 2-10 years
            • Higher rate than t-bills
          • Tresury bonds: $1,000+, 10-30 years
          • Interest is taxed by federal govt, but not state/local
    • Investment Options, cont.
      • Medium Risk/Medium Return
        • Mutual Funds
          • Pools money of many investors to buy large selection of securities
          • Automatic diversification, personalize
          • Allows small investors a way in
        • Annuities
          • Buy from insurance company and get regular monthly payments (usually after retirement)
          • “Opposite of life insurance”
    • Investment Options, cont.
      • Medium Risk/Medium Returns, cont.
        • Self-managed Retirement Acccounts
          • 401k, 403b (non-profit), 503b (govt)
          • IRA - Individual Retirement Account
            • Tax Deductible
          • Keogh Plan
            • Similar to IRA but for self-employed
        • Real Estate
          • Large, non-liquid investment
    • Investment Options, cont.
      • High Risk/High Return
        • Stocks and Trading Instruments
          • Stock: A unit (share) of ownership in a corporation
          • Return on Investment: Increased value, dividends
            • Companies give profits to stockholders as dividends
        • Futures
          • Buy and sell commodities (stuff)
          • Betting that the price will go up
          • Very risky
    • Investment Options, cont.
      • High Risk/High Return, cont.
        • Options
          • The right to buy or sell at a specific price
            • Limited to specific time period
        • Penny Stocks
          • Low priced stocks of small companies
          • Companies have no track record, few assets, no earnings, no revenues
          • Many will fail, Dot-com bust
        • Collectibles