Consumers 2: Investing

why do we invest?

save for retirement but life along the way

investing

choosing to save money in a way that earns income

steps to invest

evaluate your risks, limit risks through diversification, invest in what you know

stock

unit of ownership

stockholder

investors buy and own

stock broker

person who handles buying/selling stock/bonds

stock exchange

orders to sell stock/bonds are carried out

stock brockeridge

company helps people buy and sell

blue chip stock

large well established company

growth stock

young and quickly growing

sector stock

based on industry

penny stock

usually selling at $5 or less

cap stock

based on size of the company

cyiclical stock

goes up and down with economy

international stock

not based in the US ex: Kia, toyota

Two companies

NASDAQ, NYSE

why do prices change

supply and demand

blue chip examples

pepsi, Disney, apple, coke

growth examples

tesla,Amazon, nvidia

junk bonds

high risk/high return: company bankruptcy

stocks:

companies raise money by selling part of their company ex: shark tank

bonds

borrow money and pay back in future at one time from investors

loans

borrow money from lenders and make monthly payments

dollar cost avergining

buy, then buy more, spread your risk

mutal funds

diversify company “POOL” money together

index fund

follow the market, russell 500

insider trading

trading stocks based on info NOT available to general public

SEC

polices the stock market

IPO: intal public offering

offering to public in new stock income, transition to public company

pension plan

retirement plan only 16% companies have one

401k

employer maintaining programs, try to put in maxium

IRA: Regular

dont get taxed now, tax when withdrawl

IRA:roth

get taxed now, no later on what u earn

403

goverment and non profit, non public

whats best for teenagers

roth

examples to invest in real estate

buying a house, buying a house and fixing it to resell