1. Investments

2. Investments Investments Inflation:
The best time to start planning for your future is today!
When setting up investment account it is important to:
Balance Your Budget
Establish a line of credit
Start an emergency fund
Inflation:
Prices rise faster than the rate of interest earned on investments
Monitor investments at least once per year

3. Stocks and Equities
Equities and Stocks have historically been the investment that has earned the most money over time.
Stocks (NYSE, NASDAQ)
Purchase equity interest in companies in the form of stocks.
Share in companies profits
Common Stock (most common)
Allows voting rights
Preferred Stocks
Guarantee larger dividend payment that common stocks
No voting rights

4. Stocks/Commodities Dow Jones Industrial Average Blue Chip Stocks
Average 30 stocks traded on NYSE/NASDAQ
Blue Chip Stocks
Well established large company that has operated for many ears
Market capital in billions
blue-chips have a record of paying stable or rising dividends for years, if not decades
Futures Trading Investment
Certain specific asset is traded at a future date
Commodities: corn, oil, beef, etc…

5. Bonds Bonds Debt investment Issue Date Coupons Rate Maturity Date
Investor loans money to entity (corporate or government) which borrows funds for a period of time
Typically pay interest every 6 months
Issue Date
Date in which bond holder receives interest
Coupons Rate
Sum of annual coupon payment divided by par value (face value)
Maturity Date
Date in which principle of Bond is due
When interest rise, bond prices fall
When interest falls, bond prices rise

6. Risks Types of Risks (some) Inflation Risk Market Risk Credit Risk
Chance cash flows of investment may be less in future
Market Risk
Experience loss due to performance of financial market
Credit Risk
Risk of default on debt
Liquidity Risk
Inability to covert security into cash w/out loss of value
Interest Risk
Arises from fluctuating interest rates

7. Diversification and Asset Allocation
Reduce investment risk by diversifying portfolio
Invest among a number of different types of investments
Asset Allocation
Protecting your investment b balancing the risk versus rewards
Considers investors risk tolerance, age, and goals

8. Retirement Planning IRA Roth IRA Employer Sponsored Retirement Plan
Individual Retirement Account
Savings account with large tax breaks
Roth IRA
Expect tax rate to be higher during retirement than current rate
Ideal for young, lower income workers
Employer Sponsored Retirement Plan
Pension Plans
Employer sponsored defined benefits plan
401K, 403B