- Evaluate investment alternatives: money markets, bonds, single stocks, mutual funds, annuities, and real estate.
- Explain the Rule of 72.
- Identify different types of retirement plans.
- Explain how taxes affect the rate of return on investments.
- Understand how pre-tax and after-tax investments work.
- Understand how the stock market works.
- Be familiar with the various retirement account tax treatments.
- Develop a plan for investing; describe how to buy and sell investments.
- Watch Video 2.2
- Record the missing words from pages 169-170 of the textbook as they pop up on the left side of the video screen by filling in this form. (pages 169-170) .
- Discussion Questions:
- Explain how mutual funds work.
- What is the main advantage of a mutual fund?
- What level of risk do mutual funds carry if well diversified?
- Make a copy of this Google Document. Rename the document Prospectus-(Your Initials) and move it into your Chapter 8 folder.
- Research a current mutual fund. There are many websites (Yahoo Finance, MSN Money, Morningstar, CNN Money) that can be used, but I prefer Market Watch.
- Use the sample prospectus on page two of the document to help you fill out your mutual fund information on page one. Below is a list of information you will want to identify:
- What type of fund is it?
- How many years of experience has the manager had with the fund?
- What are the top companies the fund is invested in?
- Look for a minimum five-year return.
- What are the fees and expenses?
- What is the turnover ratio, which measures the fund’s trading activity?
- Compared to other funds in its category, what is the risk?
- How much do you need to open an account?
- In your Personal Finance Journal-C8 file in your Chapter 8 folder, complete the next row in the table by answering the question listed.