1. Stocks and Bonds The Key to Retirement (and maybe getting rich)

2. The Stock Market Stocks are a great tool for long-term investments. Stocks are a great tool for long-term investments. Don’t “day trade.” Don’t “day trade.” Buying and selling the same trading day Buying and selling the same trading day Stocks are too volatile (change too much within a day) Stocks are too volatile (change too much within a day)

3. Historical Stock Trends You’re practically guaranteed to make money (long-term). You’re practically guaranteed to make money (long-term). There has never been a 10-year period where stocks were less valuable at the end of the 10 years. There has never been a 10-year period where stocks were less valuable at the end of the 10 years. Even 1925 to 1935 (The Great Depression) saw a gain! Even 1925 to 1935 (The Great Depression) saw a gain! The Four-Year Stock Cycle The Four-Year Stock Cycle Bull and Bear Markets Bull and Bear Markets

4. Stock Market Cycles: 1890 - 1920

5. Stock Market Cycles: 1920 - 1940

6. Stock Market Cycles: 1940 - 1960

7. Stock Market Cycles: 1960 - 1980

8. Stock Market Cycles: 1980 - 2008

9. Signs of a Stock Market Crash Good times signal upcoming bad times: Good times signal upcoming bad times: Rising stock dividends and prices Rising stock dividends and prices Increase in personal savings Increase in personal savings Relatively easy money policy Relatively easy money policy Company investment in new production Company investment in new production Lack of stock market regulation Lack of stock market regulation Psychology of consumption Psychology of consumption

10. The Secret Think long-term (At least 10 years) Think long-term (At least 10 years) Diversify Diversify Different companies and different industries. Different companies and different industries. Value Investing Value Investing Buy about 20-30 different stocks. Buy about 20-30 different stocks. More than 30 won’t help much. More than 30 won’t help much. Warren Buffet has only 25-30 at a time (2008 Forbes Richest Man in the World - $68 Billion). Warren Buffet has only 25-30 at a time (2008 Forbes Richest Man in the World - $68 Billion). Costly transaction fees and research requirements. Costly transaction fees and research requirements.

11. The Bad News Investing in stock is expensive Investing in stock is expensive E.g. $25/share x 100 shares = $62,500 (That’s a lot of money!) E.g. $25/share x 100 shares = $62,500 (That’s a lot of money!) The stock market is the riskiest form of investment The stock market is the riskiest form of investment Unpredictable Unpredictable Unstable Unstable

12. So how can I raise the money? Buy a few big name stocks and some bonds Buy a few big name stocks and some bonds Stocks – Higher gains, but higher risk Stocks – Higher gains, but higher risk Bonds – Lower gains, but lower risk Bonds – Lower gains, but lower risk What to look for: What to look for: The ones you hear about on the news (not the ones under investigation). The ones you hear about on the news (not the ones under investigation). Blue chip stocks – big names with little risk and steady growth (very reliable and safe) Blue chip stocks – big names with little risk and steady growth (very reliable and safe) Have a combination of nice, stable bonds. Have a combination of nice, stable bonds. Research the stocks and where they are exchanged. Research the stocks and where they are exchanged.

13. Junk Bonds Officially known as “high yield bonds.” Officially known as “high yield bonds.” Used to pay out corporate debt and sub-prime mortgage loans Used to pay out corporate debt and sub-prime mortgage loans Be careful! They offer extremely attractive interest rates. Be careful! They offer extremely attractive interest rates. Very high risk with little financial backing. Very high risk with little financial backing. Can be lucrative. Can be lucrative.