1. Economics 101 Class #4 Hand Out:

2. Investing Advice ? What will you do / Who will you use ? -Full Service Stockbroker: +Understands markets generally, access to research, - generally paid to sell/fees, good salesman sometimes, some percentage of asset fees -Fee Based Planner: + Not driven by trading activity, Can help with other areas (taxes, retirement) – Fees can be expensive (% assets, hourly rate, commissions from recommendations) -Discount Brokers: +Fees less than full service and Fee Based, Internet based keeps costs low – Not great support, get what you pay for -Discount Brokers have gained significant share. What demographic ?

3. Types of Orders -Market Order : Tell Broker to buy at what is market price -Limit Order: You tell Broker the maximum you are willing pay or minimum you will sell

4. How do Huge Storms impact the market ? Thoughts ? When Katrina Hit, markets up 1% that day, up 3% 13 days later. Why do you think storms tend to have positive impact ?

5. How do Wars impact the market ? Thoughts ? To Date, Wars have not been positive, Why ?

6. Stock Index 1)Grouping of number of different stocks often with similar characteristics 2) Examples include S&P 500, Dow Jones Industrial Average (DJIA), Nasdaq Composite 3) DJIA – 30 large stocks from wide spectrum 4) S&P 500: 500 of largest US stocks 5) Nasdaq: 3000 companies listed on Nasdaq exchange

7. Analysts 1) Tend to be very smart folks who analyze a specific area: Internet, Transportation, Consumer Products 2) Provide Estimates, Reports, Advice which can determine what folks do. Buy, Hold, Sell 3) Negative Earnings Surprise-Miss expectation (by company/analyst) 4) Upgrades/Downgrades