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Economics

Economics. Objectives: 1. Describe the benefits of financial planning. 2. Explain why people invest in stocks. 3. Explain futures trading and why it is risky. FMA-Warm-Up Activity What do you think it costs to buy stocks?. Activities. 1. Discuss FMA. 2. Notes.

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Economics

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  1. Economics Objectives: 1. Describe the benefits of financial planning. 2. Explain why people invest in stocks. 3. Explain futures trading and why it is risky. FMA-Warm-Up Activity What do you think it costs to buy stocks?

  2. Activities 1. Discuss FMA. 2. Notes. 3. Small Business Plan Examples 4. Finish Investment Basics—read pg 204-213 do 1-4 pg 213 5. Homework—read notes for today’s lesson on website.

  3. Notes: • Diversification: Spreading around your risk. • Capital Gain: Money you earned on investments (like buy low sell high) • Where do I invest? • *Online Brokerage firm (Charles Schwab; Sharebuilder.com, etc) • *Brick and Mortar firm (Charles Schwab; financial planners) • *Through your work plan • How do I invest? • *Traditional IRA-Individual Retirement Account (401k, 403b)—pay taxes on earnings when you withdrawal • *Roth IRA-pay taxes on money when it goes in; pay nothing on earnings!

  4. Notes: Part 2 What do I buy? Company Stocks *Blue Chips —Google, Coke, Apple—solid companies; good returns *Penny Stocks (not in our game)—very low cost stocks—risky but sometimes high yield Mutual Funds —pooling of money to buy lots of different stocks Index Fund Standard & Poor's 500 Index ($INX) Small-companyRussell 2000 Index ($RUT.X). Emerging Markets MSCI Emerging Markets Index (EEM)

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