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Chapter 11 Investing for Your Future

Chapter 11 Investing for Your Future. Investing Fundamentals Exploring Investment Options. Lesson 11.1 Investing Fundamentals. Describe the stages of investing and the relationship between risk and potential return.

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Chapter 11 Investing for Your Future

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  1. Chapter 11Investing for Your Future • Investing Fundamentals • Exploring Investment Options © South-Western Educational Publishing

  2. Lesson 11.1Investing Fundamentals Describe the stages of investing and the relationship between risk and potential return. Explain effective investment strategies, criteria for choosing an investment, and steps for investing wisely. © South-Western Educational Publishing

  3. Stages of Investing • Stage 1. Put-and-take account • Stage 2. Beginning investing • Stage 3. Systematic investing • Stage 4. Strategic investing • Stage 5. Speculative investing © South-Western Educational Publishing

  4. Reasons for Investing • Investing helps beat inflation. • Investing increases wealth. • Investing is fun and challenging. © South-Western Educational Publishing

  5. Risk and Return • Diversification • Types of risk • Interest-rate risk • Political risk • Market risk • Company or industry risk © South-Western Educational Publishing

  6. Criteria for Choosing an Investment • Safety • High liquidity • High dividends or interest • Growth in value that exceeds the inflation rate • Reasonable purchase price • Tax benefits © South-Western Educational Publishing

  7. Wise Investment Practices • Define your financial goals. • Go slowly. • Follow through. • Keep good records. • Seek good investment advice. • Keep investment knowledge current. • Know your limits. © South-Western Educational Publishing

  8. Lesson 11.2Exploring Investment Options List and describe sources of financial information useful for making investment decisions. List and define basic investment options, rated by risk. © South-Western Educational Publishing

  9. Sources of Financial Information • Newspapers • Investor services and newsletters • Financial magazines • Brokers • Financial advisers • Annual reports and financial statements • Online investor education © South-Western Educational Publishing

  10. Investment Options • Low risk: low-to-medium return • Medium risk: medium return • High risk: high return © South-Western Educational Publishing

  11. Low Risk:Low-to-Medium Return • Corporate and municipal bonds • U.S. government savings bonds • Treasury securities © South-Western Educational Publishing

  12. Medium Risk:Medium Return • Mutual funds • Annuities • Self-managed retirement accounts • Real estate © South-Western Educational Publishing

  13. High Risk:High Return • Stocks and trading instruments • Futures • Options • Penny stocks • Collectibles © South-Western Educational Publishing

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