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Understanding Investments: Types, Strategies, and Economic Impact

This guide explores why investing is essential for earning returns on your money. It covers various investment types, including savings accounts, stocks, and bonds, highlighting their characteristics and risks. You will learn important vocabulary such as principle and interest, and engage in an investment activity to simulate real-world investing. Through rounds of strategies, you will experience buying and selling investments, maximizing returns, and navigating economic news that impacts your portfolio. Prepare to enhance your financial literacy and make informed decisions.

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Understanding Investments: Types, Strategies, and Economic Impact

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Presentation Transcript

  1. Investments

  2. Why would you invest money? • The goal is to get a return (profit earned by an investor.)

  3. Schoolhouse Rock Video • http://www.youtube.com/watch?v=foaYpoH0Fnk

  4. What are some different types of investments? • Savings • Stocks • Bonds • Company bonds • Government bonds

  5. Savings • Savings and checking accounts- Institutions accept people’s money and them loan it out to people. • Important vocabulary • Principle- initial amount deposited • Interest- Payment received when loaning money

  6. Stocks • Stocks are buying partial ownership of a company and if the company does well, the value of your stock does up. • Analogy- A stock is like a block in this castle. The bigger it is the more valuable it is.

  7. Bond • A bond is lending money to a company • Like James Bond movies there is almost always a return

  8. Company Bond • Companies use them to buy new equipment, research, and promise to pay bondholders interest.

  9. Government bonds • These are when you borrow money to the government. • Considered one of the safest of all investments. • One example was War bonds which were purchased during World War 2 and other wars to help fund the military.

  10. Investment Activity • During this activity you are going to act as the Investor. • You start with $1000 • There will be seven rounds • You are trying to maximize your return

  11. Steps each round • Step 1: Calculate the value of everything you own • Step 2: Sell what you wish to and add the value of the sales to your additional wealth. • Step 3: Use your additional wealth to purchase any new additional investments which you want. (You must pay the current amount the investment is worth in this game round.) • Remember to record you calculations

  12. Round 1 • Make initial purchases

  13. Activity review • Example: • Round 1: • Total wealth: 1000__ • New purchases: Quantity (How Many): Costs: • _________GPC______ _____2_____ __250____ • __________________ ___________ _________ • __________________ ___________ _________ • __________________ ___________ _________ • Extra Money: __750____ • Round 2: • Total Wealth: __1030_ • Sales: • ____1 GPC____ 750=140= 890 Extra money Sale value: __140___ • ______________ Sale value: ________ • ______________ Sale value: ________ • ______________ Sale value: ________ • New purchases: • _____2 GB_____ 890-210= 680 Extra Money Purchase Cost: ___210__ • ______________ Purchase Cost: ________ • ______________ Purchase Cost: ________ • ______________ Purchase Cost: ________ • Extra Money: ___680____

  14. Round 2 • Next round News: Big movie expected

  15. Round 3 • Next Round news: Hurricane season coming

  16. Round 3 • Next round news: Chicken found to be healthy

  17. Round 4 • Next round news: Raising interest in Zoo Zoo Phone

  18. Round 5 • Next Round News: Recession predicted

  19. Round 6 • Next Round News: More stable recovery

  20. Round 7 • Remember to calculate your final wealth

  21. Reflection • Take some time to finish the reflection on page 6 using the information you learned during the activity

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