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  1. DO NOW: The highs and lows of a fluctuating stock price are hard to predict. As a new stock trader, have you found it difficult to “time the market?” For example, did you ever buy a stock and wished you had waited, or did you ever sell a stock too soon? Why is it so hard to “time” the market? Why is it important to diversify your stock portfolio?

  2. Introduction Welcome! Today, you are going on a Web Quest to investigate Mutual Funds. What is a mutual fund? How can investors invest in mutual funds? Why are they so popular? Why are there so many mutual funds? What are the different types of funds? And, why are they more mutual funds than there are stocks in the market?? AIM: Why should I consider including mutual funds in my investment portfolio? • Introduction • Tasks • Process • Conclusion • Assessment • Teacher Page

  3. What is a Mutual Fund? A mutual fund is a collection of stocks, bonds and other securities owned by a group of investors and managed by a professional investment advisory firm. The investment firm collects money from investors, pools it and invests it. The mutual fund manager, working with a team of analysts, decides which stocks and securities to include in the fund, often investing in 100 or more securities. Some mutual funds are index funds, which closely follow a particular index of stocks such as the S&P 500 or the Dow. Mutual funds fit the needs of people with a variety of risk tolerances—from the very conservative to the more speculative. Every day the fund's managers and analysts evaluate the performance of each security and how current economic, social and political events might affect their holdings. Based on these factors, the fund manager decides which securities in the fund to keep or sell. All mutual funds have investment objectives, for example, value funds only invest in stocks the fund’s managers believe are undervalued. A mutual fund may invest in a particular sector (i.e. technology), market index (S&P 500), company size(Small Cap/Large Cap), or specific category (i.e. socially responsible companies.)

  4. Introduction • Tasks • Process • Conclusion • Assessment • Teacher Page

  5. Task • Introduction • Tasks • Process • Conclusion • Assessment • Teacher Page First, you are to research different mutual funds. Identify the advantages and disadvantages of investing in mutual funds. How do mutual funds compare to your “Stock Market Game” portfolio of stocks that you have complied and managed over the last 7 weeks? Do you think you can do better than a mutual fund manager? Why, why not? Should investors manage their own money, or should they leave that job up to a “full-time” money manager and trained analyst team? YOUR TASK: You have just been hired by a prominent mutual fund company, The Vanguard Group. Your first assignment is to write a marketing pitch to investors for one of the company’s mutual funds. The objective is to “sell” the fund to the investor. You must make a convincing argument as to why an investor should buy a Vanguard mutual fund. You should highlight the funds risk and performance. Use the next slide, to help you in the task process.

  6. Process • Introduction • Tasks • Process • Conclusion • Assessment • Teacher Page Use to internet to look up different types of mutual funds. (I recommend finding a large mutual fund company like Vanguard, and checking out the different types of funds that they offer. ) • Vanguard Mutual Funds (A mutual fund company.) • Morningstar (A mutual fund research company.) • Google Finance (Here you can type in fund symbols…) What are the benefits of a mutual fund? What are the different fund categories? What is the difference between an index fund and an actively managed fund? What are the costs of investing in a fund? Why is investing in a fund safer than investing in individual stocks or bonds?

  7. Conclusion Congratulations! You have completed your Web Quest assignment. Why are mutual funds an effective investment vehicle? Why are mutual fundsconsidered to be “safer” investments than individual stocks or bonds? • Introduction • Tasks • Process • Conclusion • Assessment • Teacher Page