 STOCK MARKET SUMMARY  What is an INVESTMENT?  Short term sacrifice long term gain  Deregulation began in 1999

 Stock Market Crash (1929)- Banks failed due to over-investing in the stock market.  Glass Stegall Act of Strict government regulations of banks.  De-regulation – in 1999 the government eased up on some of the banking restrictions

 Wealth accumulation  Comfortable retirement  Maintain purchasing power

 RISK/ REWARD- The riskier the investment the greater potential for a large gain or loss. Small or new companies are considered a more risky investment.  Time Factor- When am I going to need this money back?

 Savings  Money Markets  CD (Certificate of Deposit)

2 Main Types: Stocks & Bonds

By issuing:  Stocks (Equities) ◦ Shares of stock represent ownership interest in company (i.e. shareholders are part owners) ◦ Shareholders participate in profits of company through growth in value of stock

 Preferred Stock- Stocks with priority and preference.  Common Stock- Most stocks are common unless specified otherwise. Prices changes with the market on a constant daily variation.  Treasury Stock- Company issued stock to employees usually in retirement plans (internally held shares of the company’s stock).

 Bonds (Fixed Income) ◦ The purchaser of a bond is lending money to the company at a set interest rate specified at the time of purchase ◦ Ownership of a bond makes them a creditor of the company ◦ If a company bankrupts due to financial difficulty, bond holders have priority claims on assets before stock holders

 Government/ Govt backed- Government issued bonds or secured by the government (FEDERAL GOVT)  Municipal- Local government issued bonds (Example- School bonds)  Corporate- Company issued bonds

 Stocks  Bonds  Mutual Funds

What is a Mutual Fund?  Investors pool their money together into a fund, a “mutual fund”  A professional money management team is hired to manage the fund  The management team decides which stocks and/or bonds to buy and sell and when

 By design mutual funds are less risky than individual stocks and even bonds because of DIVERSIFICATION.  You can purchase multiple stocks and bonds to spread out the risk.  Mutual funds are a very popular way for people to invest due to their features and benefits

 Annuities  Options- ◦ Calls- ◦ Puts-  Foreign Exchange (FOREX)  Commodities-

 Saving for retirement is the primary reason most people invest  RETIREMENT PLANS ◦ IRA- ◦ ROTH IRA- ◦ 401k-

 The reality is that each one of us is in control of our own retirement destiny  The earlier you begin saving the more likely you will be in a better position in retirement  More time to accumulate retirement dollars  Compounding effect of your earnings making earnings is more powerful the longer you invest

 The reality is that everyone has a different amount that will work for them but there are some consistent rules of thumb:  You should only expect to be able to draw out about 5% per year for income from the value of the assets you have accumulated (i.e. $1,000,000 x 5% = $50,000)  You will need approximately 75 to 85 percent of your working years income to maintain your standard of living during retirement

2x3x5x7x52x20 = $218,400.00

2 people 3 meals a day 5 dollars per meal 7 days per week 52 weeks per year 20 years (65% chance of living at least 20 years if you retire at age 62) $218,400 just to eat !!!

 INDEX- ◦ DJIA- ◦ S&P 500 MARKETS- NYSE- NASDAQ-

 Financial Advisor  Financial Analyst  Portfolio Manager  Investment Banker