Introduction to Business © Thomson South-Western ChapterChapter Savings and Investment Strategies Saving and investment planning Stock investments Bonds and mutual funds Real estate investments Other investments 19

Introduction to Business © Thomson South-Western Chapter 19 Slide 2 LESSON 19-1 Saving and Investment Planning Goals Explain the basics of saving and investing. Identify types of savings and investments. Discuss factors to consider when evaluating savings and investment alternatives.

Introduction to Business © Thomson South-Western Chapter 19 Slide 3 Key Terms saving investing yield liquidity

Introduction to Business © Thomson South-Western Chapter 19 Slide 4 SAVING AND INVESTMENT BASICS Savings and investment activities Determine investment goals The growth of savings Interest Compound interest

Introduction to Business © Thomson South-Western Chapter 19 Slide 5 COMPOUND INTEREST (QUARTERLY)

Introduction to Business © Thomson South-Western Chapter 19 Slide 6 >> C H E C K P O I N T How does saving influence economic activity?

Introduction to Business © Thomson South-Western Chapter 19 Slide 7 SAVING AND INVESTMENT CHOICES Savings plans Savings account Certificate of deposit Money market account Securities Stock investments Bond investments Mutual funds

Introduction to Business © Thomson South-Western Chapter 19 Slide 8 SAVING AND INVESTMENT CHOICES Alternative investments Real estate Commodities Collectibles (continued)

Introduction to Business © Thomson South-Western Chapter 19 Slide 9 >> C H E C K P O I N T What are the nine main categories of saving and investment alternatives?

Introduction to Business © Thomson South-Western Chapter 19 Slide 10 EVALUATING SAVINGS AND INVESTMENTS Safety and risk Potential return Liquidity Taxes

Introduction to Business © Thomson South-Western Chapter 19 Slide 11

Introduction to Business © Thomson South-Western Chapter 19 Slide 12

Introduction to Business © Thomson South-Western Chapter 19 Slide 13 >> C H E C K P O I N T What are four factors to consider when selecting an investment?

Introduction to Business © Thomson South-Western Chapter 19 Slide 14 LESSON 19-2 Stock Investments Goals Compare the two major types of stock. Describe the activities involved with buying or selling stock. Identify factors that affect the value of a stock.

Introduction to Business © Thomson South-Western Chapter 19 Slide 15 Key Terms preferred stock common stock stockbroker stock exchange market value

Introduction to Business © Thomson South-Western Chapter 19 Slide 16 TYPES OF STOCK Preferred stock Common stock

Introduction to Business © Thomson South-Western Chapter 19 Slide 17 >> C H E C K P O I N T How does preferred stock differ from common stock?

Introduction to Business © Thomson South-Western Chapter 19 Slide 18 STOCK TRANSACTIONS Using a stockbroker Online investing Stock exchanges Changing stock values

Introduction to Business © Thomson South-Western Chapter 19 Slide 19 >> C H E C K P O I N T What is the purpose of a stock exchange?

Introduction to Business © Thomson South-Western Chapter 19 Slide 20 STOCK SELECTION Stock information sources Economic factors Inflation Interest rates Consumer spending Employment Company factors

Introduction to Business © Thomson South-Western Chapter 19 Slide 21 FOUR-STEP PROCESS FOR DECIDING STOCK PURCHASES 1. 1.Observe and analyze economic and social trends Determine industries that will be affected Identify companies in those industries Decide whether to buy, sell, or hold the stock of those companies.

Introduction to Business © Thomson South-Western Chapter 19 Slide 22 >> C H E C K P O I N T How do various economic factors affect stock prices?

Introduction to Business © Thomson South-Western Chapter 19 Slide 23 LESSON 19-3 Bonds and Mutual Funds Goals List types of government bonds. Describe features of corporate bonds. Describe various types of mutual funds.

Introduction to Business © Thomson South-Western Chapter 19 Slide 24 Key Terms municipal bond corporate bond mutual fund

Introduction to Business © Thomson South-Western Chapter 19 Slide 25 GOVERNMENT BONDS Municipal bonds U.S. savings bonds Other federal securities Treasury bills (T-bills) Treasury notes (T-notes) Treasury bonds (T-bonds)

Introduction to Business © Thomson South-Western Chapter 19 Slide 26 >> C H E C K P O I N T List the types of bonds issued by the federal government of the United States.

Introduction to Business © Thomson South-Western Chapter 19 Slide 27 CORPORATE BONDS Bond components Bond values

Introduction to Business © Thomson South-Western Chapter 19 Slide 28 >> C H E C K P O I N T What affects the value of a bond?

Introduction to Business © Thomson South-Western Chapter 19 Slide 29 MUTUAL FUNDS A mutual fund is an investment fund set up and managed by companies that receive money from many investors.

Introduction to Business © Thomson South-Western Chapter 19 Slide 30 TYPES OF MUTUAL FUNDS Aggressive-growth stock funds Income funds International funds Sector funds Bond funds Balanced funds

Introduction to Business © Thomson South-Western Chapter 19 Slide 31 MUTUAL FUND VALUES Shares of the mutual fund Value of each share Net asset value (NAV) Operating expenses Earnings

Introduction to Business © Thomson South-Western Chapter 19 Slide 32 >> C H E C K P O I N T What are the main types of mutual funds?

Introduction to Business © Thomson South-Western Chapter 19 Slide 33 LESSON 19-4 Real Estate Investments Goals Describe home buying activities. Explain the benefits of home ownership. Discuss the costs of home ownership.

Introduction to Business © Thomson South-Western Chapter 19 Slide 34 Key Terms real estate mortgage equity assessed value

Introduction to Business © Thomson South-Western Chapter 19 Slide 35 SELECTING HOUSING Renting your residence Owning a mobile home Buying a home Services of real estate agents Other real estate professionals Buying a condominium

Introduction to Business © Thomson South-Western Chapter 19 Slide 36 >> C H E C K P O I N T What are four available housing alternatives?

Introduction to Business © Thomson South-Western Chapter 19 Slide 37 BENEFITS OF HOME OWNERSHIP Tax benefits Increased equity Pride of ownership

Introduction to Business © Thomson South-Western Chapter 19 Slide 38 >> C H E C K P O I N T What are the main benefits of home ownership?

Introduction to Business © Thomson South-Western Chapter 19 Slide 39 COSTS OF HOME OWNERSHIP Property taxes Interest payments Property insurance Maintenance

Introduction to Business © Thomson South-Western Chapter 19 Slide 40 >> C H E C K P O I N T What are common costs of home ownership?

Introduction to Business © Thomson South-Western Chapter 19 Slide 41 LESSON 19-5 Other Investments Goals Discuss types of commodity investments. Explain the use of collectibles as an investment.

Introduction to Business © Thomson South-Western Chapter 19 Slide 42 Key Terms commodities futures contract collectibles

Introduction to Business © Thomson South-Western Chapter 19 Slide 43 COMMODITIES AND FUTURES Commodity exchanges Agricultural commodities Gold, silver, and precious metals Currency and financial instruments

Introduction to Business © Thomson South-Western Chapter 19 Slide 44 >> C H E C K P O I N T What types of commodities are commonly used with futures contracts?

Introduction to Business © Thomson South-Western Chapter 19 Slide 45 COLLECTIBLES Types of collectibles Collectible values

Introduction to Business © Thomson South-Western Chapter 19 Slide 46 >> C H E C K P O I N T What are common types of collectibles?