Mastering Saving and Investment Strategies for Financial Success

1. 19 Savings and Investment Strategies 19-1 Saving and investment planning 19-2 Stock investments 19-3 Bonds and mutual funds 19-4 Real estate investments 19-5 Other investments

2. LESSON 19-1Saving and Investment Planning Goals • Explain the basics of saving and investing. • Identify types of savings and investments. • Discuss factors to consider when evaluating savings and investment alternatives. Chapter 19

3. Key Terms • saving • investing • yield • liquidity Chapter 19

4. SAVING AND INVESTMENT BASICS • Savings and investment activities • Determine investment goals • The growth of savings • Interest • Compound interest Chapter 19

5. COMPOUND INTEREST (QUARTERLY) Chapter 19

6. >> C H E C K P O I N T How does saving influence economic activity? Chapter 19

7. SAVING AND INVESTMENT CHOICES • Savings plans • Savings account • Certificate of deposit • Money market account • Securities • Stock investments • Bond investments • Mutual funds Chapter 19

8. (continued) SAVING AND INVESTMENT CHOICES • Alternative investments • Real estate • Commodities • Collectibles Chapter 19

9. >> C H E C K P O I N T What are the nine main categories of saving and investment alternatives? Chapter 19

10. EVALUATING SAVINGS AND INVESTMENTS • Safety and risk • Potential return • Liquidity • Taxes Chapter 19

11. Chapter 19

12. Chapter 19

13. >> C H E C K P O I N T What are four factors to consider when selecting an investment? Chapter 19

14. LESSON 19-2Stock Investments Goals • Compare the two major types of stock. • Describe the activities involved with buying or selling stock. • Identify factors that affect the value of a stock. Chapter 19

15. Key Terms • preferred stock • common stock • stockbroker • stock exchange • market value Chapter 19

16. TYPES OF STOCK • Preferred stock • Common stock Chapter 19

17. >> C H E C K P O I N T How does preferred stock differ from common stock? Chapter 19

18. STOCK TRANSACTIONS • Using a stockbroker • Online investing • Stock exchanges • Changing stock values Chapter 19

19. >> C H E C K P O I N T What is the purpose of a stock exchange? Chapter 19

20. STOCK SELECTION • Stock information sources • Economic factors • Inflation • Interest rates • Consumer spending • Employment • Company factors Chapter 19

21. FOUR-STEP PROCESS FOR DECIDING STOCK PURCHASES 1. Observe and analyze economic and social trends. 2. Determine industries that will be affected. 3. Identify companies in those industries. 4. Decide whether to buy, sell, or hold the stock of those companies. Chapter 19

22. >> C H E C K P O I N T How do various economic factors affect stock prices? Chapter 19

23. LESSON 19-3Bonds and Mutual Funds Goals • List types of government bonds. • Describe features of corporate bonds. • Describe various types of mutual funds. Chapter 19

24. Key Terms • municipal bond • corporate bond • mutual fund Chapter 19

25. GOVERNMENT BONDS • Municipal bonds • U.S. savings bonds • Other federal securities • Federal notes (T-notes) • Treasury bills (T-bills) • Treasury bonds (T-bonds) Chapter 19

26. >> C H E C K P O I N T List the types of bonds issued by the federal government of the United States. Chapter 19

27. CORPORATE BONDS • Bond components • Bond values Chapter 19

28. >> C H E C K P O I N T What affects the value of a bond? Chapter 19

29. MUTUAL FUNDS • A mutual fund is an investment fund set up and managed by companies that receive money from many investors. Chapter 19

30. TYPES OF MUTUAL FUNDS • Aggressive-growth stock funds • Income funds • International funds • Sector funds • Bond funds • Balanced funds Chapter 19

31. MUTUAL FUND VALUES • Shares of the mutual fund • Value of each share • Net asset value (NAV) • Operating expenses • Earnings Chapter 19

32. >> C H E C K P O I N T What are the main types of mutual funds? Chapter 19

33. LESSON 19-4Real Estate Investments Goals • Describe home buying activities. • Explain the benefits of home ownership. • Discuss the costs of home ownership. Chapter 19

34. Key Terms • real estate • mortgage • equity • assessed value Chapter 19

35. SELECTING HOUSING • Renting your residence • Owning a mobile home • Buying a home • Services of real estate agents • Other real estate professionals • Buying a condominium Chapter 19

36. >> C H E C K P O I N T What are four available housing alternatives? Chapter 19

37. BENEFITS OF HOME OWNERSHIP • Tax benefits • Increased equity • Pride of ownership Chapter 19

38. >> C H E C K P O I N T What are the main benefits of home ownership? Chapter 19

39. COSTS OF HOME OWNERSHIP • Property taxes • Interest payments • Property insurance • Maintenance Chapter 19

40. >> C H E C K P O I N T What are common costs of home ownership? Chapter 19

41. LESSON 19-5Other Investments Goals • Discuss types of commodity investments. • Explain the use of collectibles as an investment. Chapter 19

42. Key Terms • commodities • futures contract • collectibles Chapter 19

43. COMMODITIES AND FUTURES • Commodity exchanges • Agricultural commodities • Gold, silver, and precious metals • Currency and financial instruments Chapter 19

44. >> C H E C K P O I N T What types of commodities are commonly used with futures contracts? Chapter 19

45. COLLECTIBLES • Types of collectibles • Collectible values Chapter 19

46. >> C H E C K P O I N T What are common types of collectibles? Chapter 19