1. Investments
Consumer Education

2. Investing versus Savings
Savings is the idea of putting money away for future use. Investments take saving one step further! Investing is putting money to work so that it makes even MORE money for you over time.

3. Investments Help Accomplish Long-Term Goals
Money invested is usually used to pay for long-term goals
Buying a House
Higher Education
Retirement
It is recommended that at least 10% of net income is dedicated to savings and investments each time income is received

4. Return in Investments
Return is known as the profit or income that an investment produces.
These can come in many forms depending on the investment.
-Some pay at regular intervals like a savings account (gaining interest)
- Some you can sell for a profit

5. Amount of Money Invested
Rate of Return
Total return on investment expressed as a percentage of the amount of money saved
Total Return
Amount of Money Invested
Rate of Return

6. Liquidity
Liquidity is the EASE with which assets can be converted to cash.
Example-If selling an investment like a house, were to take weeks or even months, that investment is considered less LIQUID, than one that can be sold immediately. A stock, however, is considered a liquid investment because it can be sold very quickly.

7. Volatility
Volatility is the degree to which an investment’s return or value may change.
Some investments are very volatile-their value swings up and down often & can change suddenly and drastically.—Like the stock market.
Others are relatively stable changing in value more slowly & steadily. --Like an investment in flipping house.

8. Risk & Inflation Risk
Every investment involves some degree of risk. Risk is the possibility of change in the return on your investment. It is uncertainty.
- Example-you decide to invest your savings in a new business. You don’t know if the business will be successful. You could either earn or lose a lot of money.

9. Methods for learning about investments!
For future investors, it is important to know two important strategies to build your investing power.
Diversification-this is the strategy of making a VARIETY of investments in order to reduce your exporsure to risk.
You have a million dollars to invest. You decide to put it all in ONE single investment…& it fails. If you were to DIVERSIFY your investments you wouldn’t have had all your eggs in one basket and could have possibly lost only a little bit of money in one investment and gained money in several other investments.
Portfolios-A good investor develops a portfolio which is a collection of investments that is both diversified and well balanced. Choosing the right mix of investments instead of diversifying at random.

10. Shares are individual units of ownership available for purchase.
Stock
Stock-ownership in a company through shares.
Stockholder or shareholder
Shares are individual units of ownership available for purchase.
Owner of the stock
Usually a stockholder owns a very small part of a company

11. The Stock Market
The organized trading of stocks is known as the STOCK MARKET.
The Stock Market works like an auction.
Those investors interested in purchasing stock bid on it. They offer the price they want to pay. If someone who owns it is willing to sell it at that price a transaction is made.
When a company FIRST issues stock, investors buy shares directly from the company in an initial public offer (IPO). After that, investors will usually buy and sell stock from other investors in that company who own it and wish to sell it.

12. The Stock Market continued…
Stocks may be traded at a stock exchange. This is a central location where stocks are sold on a trading floor.
The oldest stock exchange is the NEW YORK STOCK EXCHANGE. Large and wealthy companies are in this trade. The American Stock Exchange is the second largest. Medium & smaller companies trade here.
There are also stocks that are not traded on the floor and instead traded by phone and computer. The largest such network like this is called Nasdaq.
THE SECURITIES AND EXCHANGE COMMISSION PROTECTS THE STOCK MARKET FROM DECEPTION & FRAUD.