DUAL Finance Module 10: Saving & Investments

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Objectives:

  • Calculate interest rates and real rates of return
  • Manage risk in your investments
  • Allocate your assets in the manner that is best for you
  • Understand how difficult it is to beat the market
  • Identify and describe the primary and secondary securities markets
  • Trade securities using a broker

 Reading For This Module:

Chapter 11/12 – Keown, Arthur, “Personal Finance: Turning Money into Wealth, Prentice Hall Publishing. 6thedition

Investment Basics Textbook PowerPoint (.pptx 319KB 24SL)
Securities Markets Textbook PowerPoint (.pptx 385KB 16SL)


 Opening Vignettes:

Consistently investing in items that will NEVER generate a return will put you at a severe disadvantage.  Try to think of ways items can pay off for you.


 Introduction: Fundamentals of  Investing

This section introduces the process of investing to accomplish goals in the financial plan. The importance of establishing investment goals is stressed, as well as strategies for creating an investment plan to reach those goals. The difference between investing and speculating is considered.

Two basic investment categories are discussed: lending and ownership investments. The importance of understanding the roles of interest rates and risk is presented. Diversification is defined, and several examples of diversification strategies are provided. The section ends with a discussion of efficient markets.

Dr. Waller Lecture: Investing (video) (26:50)

This video covers Investing…..watch for tips to become a good investor and things to assist you in varying circumstances that may occur to improve your savings….

Investing Lecture PowerPoint (.pptx 47sl, 667KB)


Investing

Please print out, read and complete the worksheets below. These handouts are provided for additional reference material on investing. 

Many types of investments exist and some are riskier than others

Many types of investments exist and some are riskier than others

Investing (.pptx, 34sl, 702KB)

This presentation reiterates the basics of investing, types of investing, forces that can impact returns, and common formulas to estimate returns from investments.

Investing Information Sheet (.pdf 3pp, 414KB)


 Reflection

  • Interest rates are important in determining value of an investment and are tied to the rate of inflation
  • There are different sources of risk associated with investments
  • As your investment time horizon lengthens, invest in more riskier assets
  • It is very difficult to beat the market and as a result you should keep to your plan and invest for the long term
  • Primary securities markets is where new securities are sold
  • Previously issued securities are traded in the secondary markets which can be organized exchanges
  • Short selling involves borrowing stocks from a broker, selling high and buying back low, making a profit, and returning the stocks to the broker

 

Practice Quiz (does not count toward grade)

Open practice quiz


 

Quizzes

Take the quiz for this module on Canvas.


 

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