1. Ch. 8 & 9 Intro Video How Money Is Made

2. Bell Ringer 4/7 What was the most exciting thing you did over Spring Break?

3. SAVINGS & INVESTING

4. Saving- 10% of paycheck each month Saving is a trade-off You trade spending NOW for the ability to spend in the future. Purpose of savings is to cover future expenses whether or not you can see them coming. Unexpected expenses Car repairs, unemployment, illness, house repairs, etc.

5. Ways to Save... Savings Account at a bank (earn interest) Certificate of Deposit (CD) Earns a fixed interest for a specific period of time You cannot touch the money once you put it in a CD until the maturity date Ranges from few days to several years Savings Bond Sold in amounts of $50- $10,000

6. Savings Vs. Investing Savings= socking away money Investing= using your savings to earn more money Why invest? 1. Strengthen financial position over time 2. Provides a source of income in addition to paycheck

7. Investing A way to save Investing is a way to also earn income Risk- A chance that an investment will decrease in value All investments involve some form of risk Return- Income you earn on an investment

8. Types of investments Stocks Bonds Mutual Funds Money Market Accounts Real Estate Collectables

9. Stocks Partial ownership of a company Companies sell stock to raise funds Common way of investing

10. Stock Market Basics Stock: ownership interest in a corporationShares: individual units of ownership, available for purchaseShareholder: investors who purchase shares of stock; part owners Stockbroker: A person who handles the transfer of stocks and bonds between buyer and seller

11. How are stocks traded? Central location where stocks are sold on a trading floor. Wall Street- Manhattan; home of oldest stock exchange NYSE 500 most widely held companies (70% diversification) S&P 500 OTC Stock: over the counter, where they are traded by phone & computer NASDAQ Stock Exchange

12. Tracking the Stock Market: Dow Jones Tracks 30 stocks of large, well known companies Called BLUE CHIP STOCKS! NASDAQ Tracks more than 5,000 domestic stocks Standard & Poor's 500 Measures average performance of 500 stocks Industrial, transportation, financial, & utility

13. TraBLUE CHIP STOCKS! video Tracks more than 5,000 domestic stocks

14. Dow Jones Industrial Average 1.Alcoa Inc. 2.American Express 3.AT&T 4.Bank of America 5.Boeing 6.Caterpillar 7.Chevron 8.Cisco Systems 9.Coca-Cola 10.DuPont 11.Exxon Corp. 12.General Electric 13.Hewlett Packard 14.Home Depot 15.Intel 16.IBM 17. Johnson & Johnson 18. J.P. Morgan/Chase 19. Kraft 20. McDonald’s Corp. 21. Merck & Co. 22. Microsoft 23. 3M 24. Pfizer 25. Procter & Gamble 26. The Traveler’s Companies 27. United Technologies Corp. 28. Verizon 29. Wal-mart 30. Walt Disney Co.

15. Ticker Symbols 1 to 5 letter symbols used to identify companies being traded NYSE: 3 letters or less NASDAQ: 4 letters APPL – ANF – CMG – GOOG – Ticker Symbol Worksheet

16. Diversification Spreading your risk among many different types of investment. Example- Investing in some blue chip stocks as well as some more risky stocks. Why would this be a smart way to invest?

17. Bull vs. Bear Market:

18. The UPS and DOWNS of Stocks Capital Gains Sell stock for more than you paid for it. Example…bought 100 shares of Apple @ $80 share (total investment of $8,000). Later sold 100 shares @ $200 share ($12,000 gain). Capital Loss Sell stock for less than you paid for it. Example... You bought 100 shares of Apple @ $80 a share (total investment of $8,000). Later sold 100 shares @ $60 a share ($6,000). $2,000 loss.

19. Stock Information Volume Total shares of stock traded on the most recent trading day. 52 week range High- highest price for a stock during the yr. Low- Lowest price for a stock during the yr.

20. Stock Information Change Dollar difference between the preceding days closing price and the most recent price. Percent Change % difference between the preceding days closing price and the current price. Open Price paid in a stock’s first transaction of the current trading day.

21. Mutual Funds Pools the money of many investors and buys a large section of securities that meet the funds stated investment goal. Allow investors to spread out their risk among many different companies

22. Mutual Funds Example: Say you have $500 to invest but do not know which stock or bonds to buy, when to buy them, or when to sell them. You can buy shares in a large, professionally managed group of investments called mutual funds.

23. Mutual Fund Example Reynolds Blue Chip Growth Fund CompanySymbol% Assets YTD Return % Apple Inc.AAPL3.48121.15 Google Inc. GOOG1.4574.64 OFFICEMA X INC. OMX1.4251.96 COTT CPCOT1.07596.88 Research In Motion Limited RIMM1.0746.90 Starbucks Corporatio n SBUX0.97105.29 OFFICE DEPOT INC ODP0.9592.95 Baidu, Inc.BIDU0.94193.36 LAS VEGAS SANDS CORP LVS0.88155.31 INTL PAPER IP0.8197.80

24. Third Rock From The Sun 3rd Rock From The Sun- Stock Market

25. Researching Stocks Activity http://finance.yahoo.com Chipotle Example Pick a company you want to research Follow the instructions on the worksheet

26. Money Never Sleeps Quote: “Money never sleeps pal. I just made $800,000 in Hong Kong gold. It’s been wired to you–play with it. You done good, but you gotta keep doing good. I showed you how the game works, now school’s out.” Lesson: It’s true, money never sleeps. While you go to bed every night, your money is working either for you in an investment or against you on a loan earning interest or some kind of return. The quote is especially true if you’re sophisticated enough to invest in foreign markets, because people are actually awake over there when you’re usually sleeping.

27. Time Is Money Quote:“If there’s one thing I learned in prison, it’s that money is not the prime commodity in our lives…time is.” Lesson: Gekko served 23 years in jail after the events of the first film because Fox snitched on him to the Securities and Exchange Commission. If money never sleeps, imagine how much money Gekko lost out on while behind bars for over two decades. Whether it’s you or your money, every idle second is money and opportunity lost.

28. Manage Calculated Risks Quote:“If it weren’t for people who took risks, where would we be in this world?” Lesson: With risk comes reward. In order to achieve an attractive return, you have to accept a certain level of risk. There’s a reason most people can’t retire on savings account interest alone. How much risk you’re willing to tolerate, however, is entirely up to you.

29. Greed is legal, maybe not so good Quote: “Someone reminded me I once said greed is good. Now, it seems it’s legal.” Lesson: Greed is legal, the things that it drives people to do may not be.

30. Have A Plan Quote: “When you don’t know what you’re doing, it’s fatal, Mr. Moore.” Lesson: If you don’t understand the investment–be it a stock, bond, mutual fund, commodity, etc.–you should study up on it and know exactly what your money is funding or not invest in it at all. The internet is loaded with free investment tool for this purpose.