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INVESTMENTS

INVESTMENTS Strategies, Retirement, Stock Market… INVESTMENT Investing—putting money to work so that it makes even more money over time. INVESTMENT CHARACTERISTICS Return—income an investment produces Liquidity—the ease with which assets can be converted to cash

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INVESTMENTS

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  1. INVESTMENTS Strategies, Retirement, Stock Market…

  2. INVESTMENT Investing—putting money to work so that it makes even more money over time.

  3. INVESTMENT CHARACTERISTICS • Return—income an investment produces • Liquidity—the ease with which assets can be converted to cash • Volatility—the degree to which an investment’s return or value may change • Risk—possibility of variation in the return on investment

  4. PRINCIPLES OF INVESTING • Identify Objectives—purpose/goals • Focus on Strategy *income *growth *tax reduction • Diversify Investments

  5. LEARNING ABOUT INVESTING • Reliable media sources • Courses in financial planning • Investment clubs • Professional advisors

  6. RETIREMENT PLANNING • Social Security • Pension Plans • Defined-benefit plan • Defined-contribution plan • 401K • Others

  7. PERSONAL INVESTMENTS • Individual Retirement Accounts • Traditional IRA • Roth IRA • Keogh Plans

  8. TAKING CHARGE • Start Early • Review Your Plan Regularly

  9. STOCK MARKET • Stock—ownership interest in corporation • Shares—individual units of ownership • Shareholders—part-owners of the corporation

  10. STOCK TRADING • Stock Market—auction of sorts • Stock Exchange—trading floor • NYSE-New York Stock Exchange • AMEX-American Stock Exchange • Nasdaq—global electronic network • SEC—Securities and Exchange Commission

  11. RETURNS ON STOCKS • Dividend—a payment to shareholders that represents a portion of the company’s net profits • Capital gains and losses—buy low, sell high=capital gain or buy high, sell low=capital loss

  12. OTHER WAYS TO BUY STOCK • 401(K)—defined contribution plan employee contributes on a pre-tax basis which might be invested in stock • ESOP—Employee Stock Ownership Plan • Mutual Funds—a group of investments held in common by many individual investors

  13. RISK OF OWNING STOCK • The Company’s Health • Industry Trends • Economic Factors • National and World Events

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