Buying Stock ELEMENTARY AND MIDDLE SCHOOL
Investing Options Bonds
Companies, the federal government, and states borrow money by selling bonds to individuals. With a bond, you lend money to a company or to the government. In exchange, the company or government promises to pay you interest and return the money you lent at an agreed upon time.
Certificates of Deposits (CDs)
A CD is like a savings account. The difference is that you agree to keep your money with the lender for a set period of time. In return, you earn a higher rate of interest on your money.
Mutual Funds A mutual fund is managed by an investment professional, who
selects a combination of stocks or bonds and puts them in a fund. You buy a share of the fund. The value of the fund will rise and fall as the value of the underlying stocks and bonds change. You pay a fee for someone to manage your mutual fund investment.
An investment in the stock market is made by investing in a specific company. This is done by buying a share of that company’s stock. When you buy a stock you now are a partial owner of the company. You share in its profits or in its losses (a rise or fall in the value of your stock). You also may collect a dividend. Stocks that pay dividends usually do so every three months. The collection of the stocks you own is called your portfolio. If you decide to invest in stock, it is important to learn about the company, including its management and financial health, and the industry in which you are considering an investment.
Directions. You are interested in purchasing stock in a company. Which company would you choose? Why would you choose it? Write your answers in the spaces provided.
Company: ______________________ a. Ticker Symbol: ____________________ b. One reason why you chose this company: ___________________ __________________________________________________
Now, imagine that you bought that stock five years ago. Go online (or to a local library) and look up the year-end price for your stock over the past five years. There are many sites that can help you. Search: “finding historical stock prices.” Select a site and enter the company’s name or ticker symbol.
How You Can Share MIDDLE AND HIGH SCHOOL
There are lots of ways to decide which type of organization best suits your giving profile. For example, you might choose to give to an organization that: • supports a cause important to you. • includes people you know who work at or contribute to the organization. • hosts a charity event (dance, race, or auction) in which you’d like to be included.
• makes a difference in your community.
If you are looking for an organization to support, here’s one approach to get you started: 1. Identify an area of interest to you.
2. Talk to people about your interest and learn what they know about charitable organizations.
12 3. Conduct an Internet search for nonprofits that support your interests.
Learn about the identified organizations. Here are some useful steps: 1. Review the organization’s website and look at its mission and values. These statements represent the organization’s aspirations and the manner in which it conducts business.
2. Visit or volunteer with the organization. Meet the people involved in the organization. Learn how they plan to create change.
3. Go to sites like Charity Navigator or Guidestar to further research the organization. These sites rank the organization’s management using financial and management metrics.
Write the year-end prices for your stock for the past five years in the spaces provided. Year
1. ______ 2. ______ 3. ______ 4. ______ 5. ______
______ ______ ______ ______ ______
Finally, draw a chart to show how the stock price went up or down over the past five years. Put the price of the stock on the Y-axis (vertical axis) and the year on the X-axis (horizontal axis). When was the best time to buy the stock (lowest price)? When was the best time to sell the stock (highest price)?
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