© South-Western Educational Publishing Chapter 11 Investing for Your Future  Investing Fundamentals  Exploring Investment Options

GOALS © South-Western Educational Publishing Lesson 11.1 Investing Fundamentals  Describe the stages of investing and the relationship between risk and return.  Discuss investment strategies, options, and sources of information.

© South-Western Educational Publishing Stages of Investing  Stage 1. Put-and-take account  Stage 2. Beginning investing  Stage 3. Systematic investing  Stage 4. Strategic investing  Stage 5. Speculative investing

© South-Western Educational Publishing Reasons for Investing  Investing helps beat inflation.  Investing increases wealth.  Investing is fun and challenging.

© South-Western Educational Publishing Risk and Return  Diversification  Types of risk  Interest-rate risk  Political risk  Market risk  Company or industry risk

© South-Western Educational Publishing Criteria for Choosing an Investment  Degree of safety  Degree of liquidity  Expected dividends or interest  Expected growth in value that exceeds the inflation rate  Reasonable purchase price and fees  Tax benefits

© South-Western Educational Publishing Wise Investment Practices  Define your financial goals.  Go slowly.  Follow through.  Keep good records.  Seek good investment advice.  Keep investment knowledge current.  Know your limits.

GOALS © South-Western Educational Publishing Lesson 11.2 Exploring Investment Options  List and describe sources of financial information to make investment decisions.  List and define basic investment options, rated by risk.

© South-Western Educational Publishing Sources of Financial Information  Newspapers  Investor services and newsletters  Financial magazines  Brokers  Financial advisers  Annual reports  Online investor education

© South-Western Educational Publishing Investment Options  Low risk/low return  Medium risk/medium return  High risk/high return

© South-Western Educational Publishing Low Risk/ Low Return  Corporate and municipal bonds  U.S. government savings bonds  Treasury securities

© South-Western Educational Publishing Medium Risk/ Medium Return  Stocks  Mutual funds  Annuities

© South-Western Educational Publishing High Risk/ High Return  Futures  Options  Penny stocks  Collectibles