Ask students to read the article on the following page and answer the following questions, страница 2

Project 2 Write a Magazine Article

Write a magazine article of at least five pages, with illustrations, titled, “What You Should Know about Investing.” Among the topics you should discuss are: 1) setting goals; 2) tolerance for risk; 3) asset classes: stocks, bonds, mutual funds, and cash; 4) asset allocation.

To prepare for your project, you’ll need to access the three tutorials below. Follow the directions that come with the tutorials. After completing this preparation, you’ll have enough information to write your magazine article.

Project 3 Create a video

Create a video of at least ten minutes titled, “What You Should Know about Investing,” that includes charts and other illustrations. Among the topics you should discuss are: 1) setting goals; 2) tolerance for risk; 3) asset classes: stocks, bonds, mutual funds, and cash; 4) asset allocation.

To prepare for your project, you’ll need to access the three tutorials below. Follow the directions that come with the tutorials. After completing this preparation, you’ll have enough information to create your video.

Tutorial 1: Setting Goals

Access: Setting and Achieving Financial Goals.pdf/Bank of information folder

Complete the following sections: “Financial Goals,” “Short- Term Goals,” “Long-Term Goals,” and “Prioritizing Goals.” Then fill in the “Goal Worksheet,” identifying as many goals as you feel are necessary. Based on what you read and wrote, answer the following questions:

·  What did you learn about setting and achieving financial goals from this reading?

·  How would you prioritize your goals?

·  According to the author of the accompanying material, how are goals and values related?

·  Why is goal-setting considered an essential step in investing effectively?

Tutorial 2:Tutorial: Tolerance for Risk

Access http://www.rce.rutgers.edu/money/riskquiz/ default.asp./Bank of Information Folder

Take the short quiz. After completing the quiz, answer the following questions:

·  What is “risk tolerance?”

·  Why should investors know their risk tolerance before investing?

·  How would you rate your risk tolerance: high, moderate, or low?

·  To what extent did the quiz accurately measure your risk tolerance?

Explain the importance of the following considerations to a potential investor’s risk tolerance:

·  Need for ready cash in the event of an unexpected major expense

·  Time frame for accumulating money before it will be needed

·  Tax treatment of profits or losses from investments

·  Investor’s ability to absorb losses

Tutorial 3: Assets and Their Allocation

Access: sections: Asset Classes; Stable Value Investments; Bonds; Stocks; Historical Performance; Create; Risk Tolerance; Investment Time Horizon; Allocate; Short Term Time Horizon; Intermediate Term Time Horizon; Long Term Time Horizon; Diversification; Market Timing/Art of Asset Allocation/ Bank of Information folder;

After completing the readings, answer the following pages:

Asset Classes

·  In what ways are individual securities different from mutual funds?

·  How are stable value and money market investments different from other kinds of investments? Explain one advantage and one disadvantage of investing in stable value or money market investments?

·  How would you describe the asset class called bonds? Explain the relationship between bond prices and interest rates. Explain one important advantage and one important disadvantage of investing in bonds.

·  How would you describe the asset class called stocks? Explain one important advantage and one important disadvantage of investing in stocks.

·  What do we learn about the different asset classes from looking at the page labeled “Historical Performance: 1926-2004?” Based on the chart on this page, what advice would you give to a person about choosing whether to invest in stocks, bonds or mutual funds?

Create and Allocate

What are the key elements of developing a personal investment strategy?

After evaluating the examples name particular features of conservative, moderate and aggressive investment strategies. Choose the one which is the most appropriate for you. Explain why.

What is diversification and why is it considered to be the best tool for accomplishing maximum earning?

What is typical of Market Timing approach? As an investor would you choose such an approach in dealing with your assets?