Investing

Introduction

Invest in the stock market! Invest in real estate! Invest in a savings account! Well… which is the best option? This unit will go over some of the ways that you can put your money to work. We will take a look at the comparisons of investing in a safe savings account or the risky stock market. Which will you choose?

Lesson Preview

In this module, we will study the following topics:

Present and Future Value: Learn how to determine the future worth of your investments.

Investment Basics: Take a look at the main concepts in investing.

Stock Transactions: Explore how stockbroker and trade fees are factored in when purchasing stocks.

Stock Dividends: Discover how you can earn annual or quarterly income checks from your shares!

Key Terms

The following key terms will help you understand the content in this module.

Annual Yield - the dividend expressed as a percent of the cost of the stock
Annual Yield - the rate at which your money earns simple interest in one year
Bond - debt security in which the authorized issuer owes the holders a debt and is required to pay interest to or to repay the principal at a pre-determined maturity
Capital Gain - is the act of selling stock to cash in on a sharp rise
Capital Loss - occurs when the stock price goes lower than what you paid for it
Certificate of Deposit (CD) - a time deposit similar to a savings account that is insured and virtually risk-free
Dividends - the return on an investment
Effective Annual Yield - the interest earned in one year divided by the principal
Face Value (of a bond) - the amount the bond is worth when it matures
Maturity – refers to the final payment date of a loan
Net Change – the difference between the closing price of a security on the day's trading and the previous day's closing price
Quoted Price (of a bond) - the percent of the face value of the cost of a bond
Share - one unit of stock
Spreadsheet – a computer application with tools that increase the user's productivity in capturing, analyzing, and sharing tabular data sets
Stock -represents the original capital paid into or invested in the business by its founders
Stock Holder – an individual or institution or person, that legally owns any part of a share of stock in a public or private corporation
Stock Market - a public entity for the trading company stock and derivatives at an agreed price