Why Invest In Stocks?

1. A Brief Look at Investment Options Why Invest In Stocks?

2. You can! • Small investment clubs are all over the U.S. made up of local, non-professional investors. • None are paid for what they do. • Each benefit in the profit or loss of the club. • All benefit from the knowledge gained. • Clubs have been in existence since the mid 1900s. • Do it yourself. Who CAN INVEST?

3. Investing is nothing more than deciding what to do with your discretionary money. • Some people spend it on items to make life nicer now. • Some people put it aside for future expenses. • Some people try to have the money grow so that they might live better in the future. Investing

4. 45 Years ago, let’s say, you had $2000 extra. You need to decide what to do. • Buy a new car. • Put it in the Mattress. • Invest it to grow for the future. Lets Go Back 35 Years

5. Mid price range car. Additional Costs – Gas, Oil, Maintenance, Insurance. Buy That New Car • 5 to 10 years the investment would be used up and become essentially worthless.

6. 45 years later you would have $2000 – enough to buy a car. How much of a car would that buy today? Put It in a Mattress • Would your money would be “safe” from loss?

7. We Want Our Money to Grow! • What options do we have? • Bank Savings Account • Certificate of Deposit (CD) • Government Bonds • Private Bonds • Stocks • Other

8. Savings paid an average of 3% over 45 years. • $2000 becomes $7790 • CDs paid an average of 4% over 45 years. • $2000 becomes $12,150 • Interest income is taxed as ordinary income • A new VW in 2003 costs $19,795 plus tax, registration and prep charges. Savings or CD

9. Government Bonds paid an average of 4.5% over 45 years. • Very little risk to the original investment • $2000 becomes $15,149 • Private Bonds paid an average of 5.5% over 35 years. • Some risk to the original investment – may be tricky • $2000 becomes $23,477 • Interest income is taxed as ordinary income. Bonds – Government or Private

10. The Stocks on the Major Exchanges Grew at 7.5% average over 45 years. • Some risk to the original investment, but most of the risk is manageable. • $2000 becomes $55,695 • Small companies grew 9.5% annually over this period (small cap). • $2000 becomes $130,041 • Gains are taxed at as little as half ordinary income – Dividends are be taxed at a lower rate also. Stocks

11. Better Investing (an investor support organization) investment strategy has a goal to double the value of investments every 5 years (15% annually). • Many clubs do not achieve this goal • At 15% over 45 years $2000 becomes $1,239,169 • Better Investing is also known as BI Investment Club Objectives

12. SUMMARY OF INVESTMENT PERFORMANCE

13. Other Investments • Paintings • Horses • Real Estate • Gold • Collections • Lottery

14. WHAT DO YOU NEED? • The will to start. • Some discretionary money. • Some help. • An investment plan • See support information at the end of this program • Look at some suggestions found here and in other places that will be suggested.

15. In order to increase your wealth so that you can beat inflation, you need to take an active part in investing. The stock market offers the best possible return and the lowest long term risk. There are several strategies to invest in stocks. Better Investing has one of the better strategies and tools sets for evaluating investments. This is a good place to start. Conclusions

16. RECOMMENDED SUPPORT • Better Investing: a non profit organization for supporting investors – www.betterinvesting.org • AAII (American Association for Individual Investors): a for profit organization for supporting investors – www.aaii.com