1. Investing: Taking Risks With Your Savings
6-2

2. Where do people keep their savings?
What other options might you have?
Benefits?
Disadvantages?

3. Stocks and Bonds What are stocks?
Corporations are formed by selling shares of stock
How does that work?
A person who buys into stock entitle them to future profits and assets of the corporation
Proof of ownership: Corporation issues stock certificates

5. People who invest in a corporation and own some of its shares of stock
Stockholders
People who invest in a corporation and own some of its shares of stock
Benefit from stock in two ways:
Dividends
Return a stockholder receives on the amount that he or she invested in the company
Typically paid out when the company makes a profit
Selling your stock
When would you want to buy stock?
When would you want to sell it?

6. What is capital gain? What is capital losses? Profit a person makes
Losses a person suffers

7. Bonds
What is a bond?
Certificate issued by a company or the government in exchange for borrowed funds
Why might this be a good way to invest?
Receive interest
Money is invested for a certain amount of time
After that is over- bond’s maturity
Differences than stock?

8. Tax-Exempt Bonds What is a tax exempt bond?
Bonds sold by government where your interest is paid on the bond and is not taxed by the government
Good investments for the wealthy, why?

9. Savings Bonds
Bonds that are purchased at half value and increase every six months until full face value is reached
Interest rates on the bonds depend on the economy
If you take out a savings bond early, you are guaranteed a fixed rate of interest

10. T-Bills, Notes, and Bonds
Treasury Bills-
Minimum investment is $1,000
Mature quickly- A few days-26 weeks
Treasury Notes-
Minimum investment of $1,000
Maturity range is 2-10 years
Treasury Bonds-
Minimum investment of ????
Maturity range is 30 years
Exempt from state and local taxes; but not federal

11. What are some ways you can buy and sell stocks and bonds?
What is a stock broker?
Person who acts as a middle man for buyers and sellers of stocks and bonds
What are some ways you can buy and sell stocks and bonds?
Call the brokerage firm
Interest firms
Over 100 online brokerage firms
Estimated 20 million investors through the internet each year

12. Stock Exchanges
What is the largest stock exchange company in the stock market?
NYSE
New York Stock Exchange
Regional Branches
International Branches
How might businesses be on these large exchanges?
Good financial standing
Usually the biggest companies in the world

15. Over-the-Counter Markets
NASDAQ?
National Association of Securities Dealers Automated Quotations
Electronic purchase and sale of stocks and bonds
Usually deals with smaller companies

17. Stock Market Indexes What is the most well known stock market index?
Measures of what is happening to a given set of stock prices for a specified list of companies
Dow-Jones Industrial Average- The “DOW”
Involves 30 major companies in the United States

19. Bond Markets
New York Exchange Bond Market and the American Exchange Bond Market- two largest in the world
Who can you hire to help you out with investing in bonds?
Financial Adviser

20. Mutual Funds
Investment company that pools the funds of many individuals to buy stocks, bonds, or other investments
Put money into many different stocks
What is the advantage to that?
What might be a disadvantage?

21. Money Market Funds
Type of mutual fund that uses investors’ funds to make short term loans to businesses and banks
Federal government insures them against loss
What FRA regulates to stock market?
SEC!
SEC was created in 1929, why is that significant?