Types of Investments

Today and tomorrow we will be watching a section of Dave Ramsey's video on Types of Investments and discussing what different types of investments mean.

First, check your Market Watch game here: http://www.marketwatch.com/game/khs2014 


Using Microsoft Word, answer the following questions:

Money Markets

• A C.D. is a __________ __ ___________, typically at a bank.
• Money market mutual funds are ____________ risk money market accounts with check writing privileges. 
• These are great for __________ _________.

Single Stocks

• Single stock investing carries an extremely _______ degree of risk.
• When you buy stock, you are buying a small piece of __________ in the company.
• Your return comes as the company increases in _________ or pays you, its owner, some of the profits (_______________).

Bonds

• A bond is a _________ instrument by which the company owes _______ money.
• Your return is the fluctuation in price and the _________ rate paid.  
• Few individuals do well with _______ _________ purchases.

Mutual Funds

• Investors pool their ___________ to invest.
• Portfolio managers manage the pool or ___________.
• Your __________ comes as the ____________ of the fund is increased.
• Mutual funds are good ____________ term investments.

Real Estate

• Least ________ consumer investment.
• You should have lots of ________ before using real estate as an ______________.

Annuities

• Annuities are _______ accounts with an _________ company.
• _______ annuities are at a low interest rate of around 5%, aren't really fixed, and are a ________ investment.
• _______ annuities are mutual funds sheltered by the annuity covering, thereby allowing the mutual fund to grow tax-deferred.

Horrible Investments

• Gold
• _______ & Futures
• Day __________
• Viaticals

Researching Individual Stocks

Today we will complete our Individual Stock Research project.  You are finding 9 stocks that are interesting to you which you will be using when we begin our Virtual Stock Exchange project.

We will also be discussing what the "range" means (52-week low/high) and what the news has to do with stock value.

Before you join our Stock Market Simulation, make sure you understand the rules.  You will receive $10,000 in virtual money (no, you don't get to keep it) to invest in stocks as low as $.50 in value.

You can join via Market Watch here: http://www.marketwatch.com/game/khs2014 (password: knights)

If you are required to join Market Watch, know that you don't have to provide much detail.  I gave them my real email address (which you will need to verify the account) and I set both my occupation and industry as "Education."  I gave them a birth year, but that's really not their business either.  Finally, note that I un-checked all of the "Newsletters and Alerts" and "Communications preferences" boxes.

There are a variety of strategies for "playing the market" -- and millions of dollars are made every year on books telling you how to do it.  The strategies are endless.  Some suggest investing in "penny stocks" -- others in "blue chip stocks".  Some tell you to buy when a stock has taken a total nosedive and some will tell you to buy when it's on its' way up.  Some tell you to invest in one risky stock and others advise you to diversify your investment.  There's no "right way" to invest in the stock market.  It's all at risk.

For my challenge (since it's not real money) I went to look for cheap stock [you can buy more stocks that way] but I wanted a large company.  I found an article for "Billion Dollar Companies With Stocks Under $10" here: http://www.cnbc.com/id/44962045/Billion_Dollar_Companies_With_Stocks_Under_10

The problems with having large numbers of low dollar stocks is that the value of your portfolio is more volatile.  I went from being in first place in our Stock Market Challenge to almost last place... and back to first within an hours time.

The Basics of Investing

Today we will begin discussing investment strategies and the Stock market:

• Today we will watch a brief cartoon about how the New York Stock Exchange works.  It's a bit choppy in parts, but I think it's a great explanation of how the Stock Exchange works -- and has worked since the cartoon was made... about 60 years ago!

• Finally we will begin researching individual stocks that you have an interest in.  For example, if you wear a certain clothing brand, drink a certain beverage, or play a particular video game, those might give you some places to start.  
• Go to http://finance.google.com
• Find 9 different stocks that you have an interest in
• Complete the following information about your stocks (you will receive a worksheet -- or you can download a copy here)

Individual Stocks:

• Company Name:
• Stock Symbol:
• Current Stock Value: $
• 52-Week Low: $
• 52-Week High: $
• News about this company: 

Make a note on your page about which stocks seem like they have the most earning potential -- and explain why.