STEP ONE: REVIEW THE INVESTMENT TYPES

Use the information from the lesson activities, and the Internet to assist you in completing this Investing Basics Chart.

Investing Basics Chart
Use this chart to take notes from the lesson. Some information has been provided for you, but you can add additional details to those sections.

Investing Basics
Type of Investment Description—explain what it is and how it works. Level of Risk and Potential Return—explain. Real-life example of this investment (name or company) Minimum investment amount or time? Easy to start or stop investment? Discuss.
CD
IRA Individual Retirement Account (IRA)—a portion of a person’s income is set aside to be withdrawn after retirement, growing interest in the meantime through investment in other securities. Employers might contribute to the account as a benefit to employees.
MMA
Stocks Usually you can’t just buy one stock—must invest a minimum dollar amount. For a large company like McDonald’s, the high start-up cost deters personal investors ($50,000 in 2012).
Bonds 30-Year Treasury Bond—U.S. Department of the Treasury
Mutual Funds
Futures High (Aggressive)—Have a potentially large return relative to other investments but also are considered the riskiest.
Traditional Bank Account
These websites can help you find information about specific investments available.

Investopedia—Investing

Market Watch—Getting Started

The Wall Street Journal—Market Data Center

Yahoo Finance

Investment Plan
After completing the reading and activities in the lesson, develop your own investment plan. Base this investment plan on your results from the spinner activity on the activity tab.

Choose three investment options from the chart for your money. Describe your investment plan in a detailed paragraph. Be sure to include responses to the following questions:

Explain how you obtained the money for investment.
Why did you choose these three options?
How do your choices reflect your tolerance for risk?
How do you plan to divide your money between the three investment options you chose? Be sure to include the following terms in your explanation:
diversification
risk
rate of return
interest rate

STEP TWO: SELECT AND EXPLAIN YOUR INVESTMENT PLAN

Choose three investment options from the chart for your money. Describe your investment plan in a detailed paragraph. Be sure to include responses to the following questions:

Explain how you obtained the money for investment.
Why did you choose these three options?
How do your choices reflect your tolerance for risk?
How do you plan to divide your money between the three investment options you chose? Be sure to include some of the following terms in your explanations:
diversification
risk
rate of return
interest rate

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