1 / 8

Investing: Taking Risks With Your Savings

Investing: Taking Risks With Your Savings. Mr. Mizak Economics Fall 2009. Stocks and Bonds. As we have learned, saving plans offer a safe rate of interest. What do people do if they want to make more money? First, you must be willing to take on more risk

pakuna
Download Presentation

Investing: Taking Risks With Your Savings

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Investing: Taking Risks With Your Savings Mr. Mizak Economics Fall 2009

  2. Stocks and Bonds • As we have learned, saving plans offer a safe rate of interest. • What do people do if they want to make more money? • First, you must be willing to take on more risk • Stocks and bonds offer greater returns but much more risk

  3. Stocks • Corporations are formed by selling shares of stock. • By selling stock a company obtains funds for use in expanding business and (hopefully) making a larger profit • Shares entitle the buyer to a certain part of the future profits of the company

  4. Stock Returns • On stocks money is made in two ways • 1) Dividends- money given to a stockholder on the amount of money originally invested in the company • 2) Individual sells the stock for more than they paid for it.

  5. Bonds • Bond- A certificate issued by a company or the government in exchange for borrowed money. • Bonds pay a stated rate of interest over a stated period of time • Buying bonds does not make a bondholder part owner of the company

  6. Savings Bonds • The U.S. government issues savings bonds as one of its ways of borrowing money • Very safe form of investment • Because of this safety, rates are not very high • Not taxed until the bond is turned in for cash

  7. T-Bills, T-Notes, and T-Bonds • Treasury Department sells several types of investment. • Treasury Bills- mature in 3 months to a year. • Minimum amount of investment is $1,000 • Treasury Note- 1- 10 years • Treasury Bonds- 10 years or more • Minimum investment $1,000 • All three are exempt from state and local income taxes but not federal income tax

  8. Mutual Funds • Mutual Funds- An investment company that pools the money o f many individuals to buy stocks, bonds, or other investments • Pros/Cons • Highly diversified • Losses in one sector will most likely be made up in another • Not likely to turn huge profits

More Related