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02.04 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 InvestmentDescription—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.
Type of Investment" style="padding: 8px;">CDDescription—explain what it is and how it works." style="padding: 8px;"> Level of Risk and Potential Return—explain." style="padding: 8px;"> Real-life example of this investment (name or company)" style="padding: 8px;"> Minimum investment amount or time? Easy to start or stop investment? Discuss." style="padding: 8px;"> 
Type of Investment" style="padding: 8px;">IRADescription—explain what it is and how it works." style="padding: 8px;">Individual Retirement Account (IRA)—a portion of a person's income is set aside to be withdrawn after retirement, growing interest in the meantime through investment in other securities.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.Level of Risk and Potential Return—explain." style="padding: 8px;"> Real-life example of this investment (name or company)" style="padding: 8px;"> Minimum investment amount or time? Easy to start or stop investment? Discuss." style="padding: 8px;"> 
Type of Investment" style="height: 100px; padding: 8px;">MMADescription—explain what it is and how it works." style="padding: 8px;"> Level of Risk and Potential Return—explain." style="padding: 8px;"> Real-life example of this investment (name or company)" style="padding: 8px;"> Minimum investment amount or time? Easy to start or stop investment? Discuss." style="padding: 8px;"> 
Type of Investment" style="padding: 8px;">StocksDescription—explain what it is and how it works." style="padding: 8px;"> Level of Risk and Potential Return—explain." style="padding: 8px;"> Real-life example of this investment (name or company)" style="padding: 8px;"> Minimum investment amount or time? Easy to start or stop investment? Discuss." style="padding: 8px;">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).
Type of Investment" style="height: 100px; padding: 8px;">BondsDescription—explain what it is and how it works." style="padding: 8px;"> Level of Risk and Potential Return—explain." style="padding: 8px;"> Real-life example of this investment (name or company)" style="padding: 8px;">30-Year Treasury Bond—U.S. Department of the TreasuryMinimum investment amount or time? Easy to start or stop investment? Discuss." style="padding: 8px;"> 
Type of Investment" style="height: 100px; padding: 8px;">Mutual FundsDescription—explain what it is and how it works." style="padding: 8px;"> Level of Risk and Potential Return—explain." style="padding: 8px;"> Real-life example of this investment (name or company)" style="padding: 8px;"> Minimum investment amount or time? Easy to start or stop investment? Discuss." style="padding: 8px;"> 
Type of Investment" style="height: 100px; padding: 8px;">FuturesDescription—explain what it is and how it works." style="padding: 8px;"> Level of Risk and Potential Return—explain." style="padding: 8px;">High (Aggressive)—Have a potentially large return relative to other investments but also are considered the riskiest.Real-life example of this investment (name or company)" style="padding: 8px;"> Minimum investment amount or time? Easy to start or stop investment? Discuss." style="padding: 8px;"> 
Type of Investment" style="height: 100px; padding: 8px;">Traditional Bank AccountDescription—explain what it is and how it works." style="padding: 8px;"> Level of Risk and Potential Return—explain." style="padding: 8px;"> Real-life example of this investment (name or company)" style="padding: 8px;"> Minimum investment amount or time? Easy to start or stop investment? Discuss." style="padding: 8px;"> 

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

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(Top Tutor) Daniel C.
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