1. INVESTMENTS 101 STOCK MARKET SUMMARY What is an INVESTMENT?
Short term sacrifice long term gain
HISTORY-
Stock Market Crash (1929) resulted in regulations of banks GSA in 1933.
Deregulation began in 1999

2. INVESTMENTS Why do people invest?
Wealth accumulation
Comfortable retirement
Maintain purchasing power

3. Factors of INVESTING
RISK/ REWARD- the higher the risk, the higher the potential reward
Time Factor- length of time (short term vs long term)

4. BANK INVESTMENTS
Savings
Money Markets
CD (Certificate of Deposit)

5. STOCK MARKET Fundamentals of Investing
2 Main Types:
Stocks & Bonds

6. How do companies finance business activities?
By issuing:
Stocks (Equities)
Shares of stock represent ownership interest in company
Shareholders participate in profits of company through growth in value of stock

7. Stocks- 3 Types 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).

8. Companies also issue… 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

9. Bonds- 3 Types
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

10. In what do people generally invest?
Stocks
Bonds
Mutual Funds

11. Mutual Fund?!? 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

12. POOL OF FUNDS

13. WHY Mutual Funds are popular?
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

14. OTHER INVESTMENTS Annuities Options- Derivatives of Stock
Calls-
Puts-
Foreign Exchange (FOREX)
Commodities-

15. Saving for retirement
Saving for retirement is the primary reason most people invest
RETIREMENT PLANS
IRA- Individual Retirement Plan (Tax Deferred Earnings)
ROTH IRA- Tax Free Earnings
401k- Company Sponsored Plan

16. THE MARKET
INDEX-
DJIA-
S&P 500
MARKETS-
NYSE-
NASDAQ-

17. Careers in the investment industry
Financial Advisor
Financial Analyst
Portfolio Manager
Investment Banker

18. THE END