Careers+and+Finance


 * Investing Your Money [[image:wall.jpg width="173" height="140"]] **

Company pensions are a thing of the past. Social Security is not intended to cover all of the financial needs of retirees. In order to achieve a secure future, you will be participating in the financial markets through individual investments or employer-based retirement programs - or both. The first step in that process is learning how smart saving and investment decisions are made. Those who start investing early can become big winners. Did you know that a $5 weekly investment at 8 percent interest beginning at the age of 18 would grow to $134,000 by the time you reach age 65?

//**__ Thursday, May 20: __** Investing: the act of committing money or capital to an endeavor with the expectation of obtaining an additional income or profit.// Or, in simplier terminology, investing means putting your money to work for you.

There are many different ways you can go about making an investment. This includes putting money into stocks, bonds, mutual funds, or real estate. It doesn't matter which method you choose for investing your money, the goal is always to put your money to work so it earns you additional profit.

True investing doesn't happen without some action on your part. A "real" investor does not simply throw money into any random investment. He or she performs thorough analysis and invests capital only when there is reasonable expectation of profit. There is still risk, and there are no guarantees, but investing is more than simply hoping that luck is on your side.

Even though all investors are trying to make money, each one comes from a diverse background and has different needs. Specific investing methods are suitable for certain types of investors.You need to decide which investment(s) are suitable for you. You need to know their characteristics and why they may be suitable for your particular type of investing. The primary advantage of a mutual fund is that you can invest your money without the time or the experince that are often needed to choose a sound investment.
 * **Bonds** are commonly used to refer to any securities that are founded on debt. When you purcahse a bond, you are lending out your money to a company or governement. In return, they agree to give you interest on your money and pay you back the amount you lent out.Bonds are relatively safe. But, because there is little risk, there is little potential return.
 * When you purchase **stocks**, you become a part owner of the business. This entitles you to vote at the shareholders' meeting and allows you to receive any profits that the company pays to its owners. These profits are referred to as //dividends//. Stocks fluctuate in value on a dailyy basis. You aren't guaranteed anything. Some stocks don't pay dividents, in which case, the only way that you can make money is if the stock increases in value.
 * A **mutual fund** is a collection of stocks and bonds. When you buy a mutual fund, you are pooling your money with a number of other investors.

A portfolio is a combination of different investment assets mixed for the purpose of achieving an investor's goal(s). Why have a portfolio? It all centers around diversification. Different securities perform differently at any point in time.

First read [|The 5 Stages of Investing] and take this [|mini quiz] It's important to remember that there's a smart way to invest that money and a smart sequential order to follow. It's important to start investing in low-risk choices only to protect your money but also to help you learn about what investing is all about. The best way to make your money grow and earn enough money to do what you want is to follow the five stages of investing.

Okay -- you are now an expert financial adviser. the following people have e-mailed you asking for advice on their next step in investing. They are at different stages of investing and they don't know where to go from here. Using what you've just read about the stages of investing, give them sound financial advice. Click [|here] for the Assessment Activity. Write your financial advice on a Word document and send as an e-mail attachment to jgrams@hlv.k12.ia.us

Class Discussion: How to Choose a Stock
 * //__ Friday, May 21: __//**

//How well do you analyze the stock market and pick stocks? Click the link to find out.// []


 * Common stock** is always issued by the corporation. It represents an ownership interest in the company. People owning common stock usually have the right to vote for the directors of the company. **Preferred stock** may also be issued by the corporation. This kind of stock is given certain preferential treatment over common stock. These stockholders may receive fixed dividends before the common stockholders are paid, along with other advantages. However, they generally have no voting privileges and cannot expect to receive more than their fixed dividend.

An excellent list of stock terms can be found on the net at the USA Today web page. Look under the heading "Financial Glossary." A **stock exchange** is the market place where brokers buy and sell stocks. The NYSE (New York Stock Exchange), AMEX (American Stock Exchange), and NASDAQ (National Association of Securities Dealers) are the three main U. S. stock exchanges. The current prices of many stocks are available on the net, along with a lot of other stock market information.
 * Stockbrokers** (or "brokers") are the people whose job it is to buy and sell stocks for the buyer. They also can give advice about which stocks might be good investments. The buyer pays the broker a small commission, or fee for services, each time stocks are bought and sold.

Current stock listings on the Internet are organized a little differently from source to source, but they all have the same basic information. First you have to type in the correct SFN, the abbreviation for the name of the company. If you don't know what the abbreviation is, you can usually find it by looking in the "Search for Symbol" section. There are many other sources, too:
 * Reading and Understanding the Stocks**

http://www.wsj.com http://www.marketwatch.com http://bloomberg.com http://multiexinvestor.com http://the%20street.com []

Once you have entered the correct SFN, you will see the information you need.
 * Last** - The most recent trade of a stock.
 * Change** - This shows the change in price from the previous dayÕs closing price.
 * Currency** - This shows the currency that is used, such as USD for U. S. dollar.
 * % Change** - This calculates the percentage change in the price of a stock from the previous day's closing price.
 * Open** - The price at which a stock opens the trading day.
 * Day Low**- This is the lowest price that a stock has traded at during the day.
 * Day High** - This is the highest price that a stock has traded at during the day.
 * Volume** - This is the daily number of shares of a stock that changes hands between a buyer and a seller. Some sources give these listings in hundreds or thousands.
 * Dividend** - The annual per share cash payout investors should expect.
 * P.E. - The Price-to-Earnings Ratio** - The ratio of the market price per share to the earnings per share.

//1. What was the highest price paid per share that day?// //2. What was the lowest price paid that day?// //3. What was the closing price paid that day? (This might not be available because the web carries the latest information, and the market can still be open and changing!)// //4. Now figure the net change. This is the difference in price from the last price paid per share on the previous day. It can be positive or negative.//
 * Look at a company's listing and figure out the answers to these questions:**

Stock quotations on the web are available in fractional form. To convert prices from their fractional form, to a decimal to the nearest thousandth consider the following: 12 3/8 means 12 3/8 dollars. Change the 3/8 by dividing 3 by 8. The result is 0.375, so 12 3/8 = 12.375.

Send your responses as an e-mail attachment to jgrams@hlv.k12.ia.us

Individual retirement accounts are considered by some people to be a personal savings account, with the money being set aside for retirement while offering tax advantages.
 * //__ Monday, May 24: Individual Retirement Accounts (IRAs) __//**

The money you invest in an IRA grows tax-free until you retire and are ready to withdraw it. In most cases you can contribute up to $4,000 a year to a **traditional IRA**, as long as you earn $4,000 a year or more. You don't pay taxes on the money in a traditional IRA until it is withdrawn. All withdrawals are taxable, and there generally are penalties on money withdrawn before age 59 1/2.

In a **Roth IRA**, contributions are not tax deductible, but once you begin to withdraw money all earnings are tax-free. The only catch: you have to have invested money in the account for at least 5 years before taking any out and you must be at least 59 1/2 years old.

Many companies offer a **401(k)** plan for employees' retirement. Participants authorize a certain percentage of their before-tax salary to be deducted from their paycheck and put into a 401(k). By putting a percentage of your salry into a 401(k), you reduce the amount of pay subject to federal and state income tax. Withdrawals for any purpose are taxable, and withdrawals before age 59 1/2 are subject to a penalty.

//** Assignment: **// // **You have $2,000 to invest in a Mutual Fund. You must invest it all, or as close to the full amount as possible. Choose a mutal fund based on [|Morning Star] ratings.** // 1. In an Excel spreadsheet record the fund name, symbol, price, rating risk, intitial purchase price, category, number of shares purchased, and total cost. 2. Write a reason why you bought the fund.

1. Your portfolio must include at least 3 companies and each must be in a different sector or industry. Example: technology, food, services, auto, entertainment. 2. Evaluate stocks based on P/E ratio, dividentds, market capitalization, and yield. 3. In an Excel spreadsheet record the individual stock you purchased, symbol, price, P/E, dividend, number of shares purchased and total cost. 4. Write a reason you bought each of your stock choices. Example: The P/E was low and the company pays a dividend.
 * //You have $2,000 to invest in stocks. You must invest it all, or as close to the full amount as possible. You investment must be diversified.// **

1. Make sure your name is in cell A1 2. Save your spreadsheet 3. Change the page orientation to Landscape 4. Preview the page and make sure it fits on one sheet. 5. Print in black and white and hand in.
 * // When your spreasheet is complete: //**

For this assignment, report on the current value of the following stocks from the New York Stock Exchange. Create a table or spreadsheet to record the information and send as an e-mail attachment to jgrams@hlv.k12.ia.us
 * //__ Tuesday, May 25: __//**

Stock :**Dean's Foods - Citi Group - Delta Airlines - General Mills - Goodyear - Nikon - Revlon** //For each stock, identify its **Abbreviation**, its **High** price, its **Low** price, its **Closing** price for today, and the **Net Change.**

Using that information, answer the following questions: 1. What stock is worth the most today? What is its closing price? 2. What stock is worth the least? What is its high? 3. Which stock experinced the greatest gain? How much did it gain? 4. What stock experinced the greatest loss and how much did it lose?//