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Introduction to Investing

You understand and acknowledge that this is for informational “purposes only.” I am not stockbrokers or investment advisors and you hold the presenter harmless for any losses you may incur based on the information provided. You understand that reference to specific securities should not be construed as a recommendation to buy or sell that security.

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Purpose/Outcomes:

  • To provide a brief overview of investing basics
  • Review key terms and ideas associated with investing
  • Participants will be equipped with the tools needed to explore their own investing options

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Investing 101

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What is Investing?

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  • Investing involves allocating money or resources to an asset or project with the expectation of generating a profit or income over time. The goal is to grow your wealth, generate income, or achieve specific financial goals.

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  • Investing IS riskier than saving, BUT it can yield a bigger payoff.

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Types of Investments:

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  • Mutual Funds: Pooled investment vehicles that invest in a diversified portfolio of stocks, bonds, or other assets. Managed by professionals.
  • Exchange-Traded Funds (ETFs): Similar to mutual funds but trade like stocks on an exchange. They often track an index and have lower fees.
  • Real Estate: Investing in physical properties for rental income or capital appreciation.
  • Commodities: Physical goods such as gold, oil, or agricultural products that can be traded.

Cash and Cash Equivalents: Includes money markets funds savings accounts, short term government bonds. These are low –risk but offer lower returns.

Stocks: Shares of ownership in a company. Investors can earn money through capital appreciation (increase in stock price) and dividends (a share of the company’s profits).

Bonds: Loans made to corporations or governments in exchange for periodic interest payments and the return of the bond's face value at maturity.

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Investment Strategies:

Long-Term Investing: Buying and holding investments for an extended period to ride out market volatility and benefit from compound growth (1+ Years).

Value Investing: Seeking undervalued stocks or assets that are expected to increase in value over time.

Growth Investing: Focusing on companies with potential for substantial growth, even if they have high valuations.

Income Investing: Investing in assets that provide regular income, such as dividend-paying stocks or bonds.

Monitoring and Adjusting: Regularly review and adjust your investment portfolio based on market conditions, performance, and changes in your financial goals.

Key Terms:

Risk and Return:

Risk: The potential for losing money or not achieving the expected return on investment. Generally, higher potential returns come with higher risk.

Return: The gain or loss on an investment over a specific period, expressed as a percentage of the original investment.

Diversification:

Diversification involves spreading investments across different asset classes or sectors to reduce risk. By diversifying, the negative performance of one investment can be offset by the positive performance of another.

Asset Allocation:

Asset Allocation is the process of dividing an investment portfolio among different asset class, like stocks, bonds, real estate and cash. The goals of asset allocation is to balance risk and reward according to an individual’s risk tolerance, investment goals and investment horizon.

Dividend Reinvestment: means using dividend payouts to buy more shares of the same stock, helping your investment grow through compounding.

Dollar Cost Averaging (DCA): is a strategy where you invest a fixed amount

regularly, buying more shares when prices are low and fewer when prices are

high, averaging the cost over time and reducing risk.

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Key Terms

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Understanding Financial Goals:

  • Establishing clear financial goals is crucial for effective investing. Consider factors like:
  • Time horizon (short-term vs. long-term)
  • Risk tolerance (how much risk you are willing to take)
  • Purpose of investing (retirement, education, major purchases)

What is an change Understanding Financial Goals:

  • Exchange - refers to the stock exchange, like New York Stock Exchange (NYSE) Large Cap Stocks, NASDAQ Tech Stocks, CBOE Chicago, London Stock Exchange (LSE)
  • Index – measure performance of a group of assets. Standard & Poor (S&P), Russell 2000 & 5000.
  • Risk tolerance (how much risk you are willing to take)
  • Purpose of investing (retirement, education, major purchases)

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Where Do I Start? - What Do I Buy? - What’s a Good Price? - When do I Sell?

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REMINDER: Always Monitor and Adjust Your Portfolio!

  • Regularly review and adjust your investment portfolio

based on market conditions, performance, and changes

in your financial goals.

Start Early, Save A Little, Save Often and Be Consistent:

  • Open a Brokerage Account.
  • Start with the items that you like, you buy, you use, the places that you go and your means of traveling there; ie Consumer Stocks.
  • Yahoo Finance or your Brokerage Account, input your Ticker (appl) and research the price history.
  • Selling stock should be based on your financial goals, always consider your time horizon, purpose of investing and risk tolerance, before you sell.
  • The earlier you start investing, the more time your money has to grow due to compounding. Consistent contributions, even in small amounts, can lead to significant growth over time.

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Investments for Children and Grandchildren

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What is a 529?

A 529 plan is a tax-advantaged savings plan designed to help pay for education. Originally limited to post-secondary education costs, it was expanded to cover K-12 education in 2017 and apprenticeship programs in 2019. The two major types of 529 plans are savings plans and prepaid tuition plans.

What Is the Uniform Gifts to Minors Act (UGMA)?

The Uniform Gifts to Minors Act (UGMA), developed in 1956 and revised in 1966, allows individuals to give or transfer assets to underage beneficiaries—traditionally, parents and their children, respectively. The amount is free of gift tax, up to a certain amount.

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Simulation: Stock Research & Purchase

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“No Monthly Fees- No Minimums”

Brokerage Accounts Charles Schwab

Fidelity

Robinhood

www- us.computershare.com/Investor/# DirectStock

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Research Stock Tickers

  • Company Profile
  • 52 Week High
  • Recent News

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Select and purchase stock based on your research

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Monitor stocks to determine if/when to sell

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Questions?

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Thank You!