INVESTMENT

FOR THE
FUTURE
Understanding financial growth
 AGENDA
Introduction
Types of investment
Risk and return
Goal setting
Bonds
Investment options
 INTRODUCTION
1.Stocks:Stocks represent ownership in a company. When you own a share of stock, you own a small
piece of that company.Buying stocks means becoming a part owner of a company. Stock prices can
fluctuate based on the company's performance and market conditions.
2.Bonds:Bonds are debt securities issued by governments, municipalities, or corporations to raise
capital.
3.Mutual Funds:A mutual fund is an investment vehicle that pools money from many investors to
invest in a diversified portfolio of stocks, bonds, or other securities.Investing in mutual funds allows you
to own a diversified portfolio without having to buy individual stocks or bonds. It provides a way to
spread risk.
4.ETFs (Exchange-Traded Funds):Think of an ETF like a mixed bag of different candies. Instead of
buying individual candies (stocks), you buy the entire bag (ETF). It's an easy way to get a variety of
treats in one go.
5.Index:Imagine an index as a report card for a group of students. It shows how well they're doing as a
group. Common indices are like class averages that tell us how the stock market is performing.
6.Diversification:Diversification is like having a mix of subjects in your school schedule. If you're not
doing well in one subject, it's okay because you're good at others. Similarly, diversifying investments
means not putting all your money in one place.

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 INVESTMENT OPTION 1
Stocks and Bonds:
 Stocks: You own a tiny piece of a company. If the company does well, your piece (stock)
becomes more valuable.
 Bonds: You lend money to a company or government. They pay you back with interest.
Real Estate:
You can invest in houses or apartments. People pay rent to live there, and you earn money.
Cryptocurrencies:
Digital money like Bitcoin. It's like having virtual cash. But be careful, the value can go up and
down a lot!
Precious Metals:
Valuable metals like gold and silver. People like to invest in them when things are uncertain.
Collectibles:
Cool things like rare toys, comic books, or vintage stuff. People might pay a lot for them.
Peer-to-Peer Lending:
You lend money to regular people online. They pay you back with interest.

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 INVESTMENT OPTION 2
Savings Accounts and CDs:
 Savings Account: Like a piggy bank, but at the bank. They pay you a little bit for keeping your money there.
 CDs (Certificates of Deposit): You agree not to touch your money for a while, and the bank pays you more interest.
Index Funds and ETFs:
You buy a little bit of everything in the stock market without picking individual stocks. It's like a combo meal of
investments.
Options and Derivatives:
A bit tricky! It's like making bets on what stocks will do. Not for beginners!
Robo-Advisors:
Smart computers help you invest without you doing much. They use math to pick good investments.
Education Savings Accounts (ESA) and 529 Plans:
Special accounts to save money for school. The government gives you some benefits to help with education costs.
Socially Responsible Investing (SRI):
Invest in companies that care about people and the planet. Your money helps good businesses grow.

Remember, it's important to learn more about each before jumping in. Some are like fast rides, and some are like slow walks.
Choose what suits you and your goals! Always ask for advice from teachers, family, or experts.

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 RISK AND RETURN
Risk in the context of investing, refers to the likelihood of losing money or the uncertainty associated with the
potential returns on an investment.

Key Points:
1.Variability of Returns: Investments inherently carry some level of uncertainty. The value of an investment
can go up or down, and the degree of fluctuation is a measure of its risk.

3.Risk Tolerance:Each investor has a different comfort level with risk. Factors like age, financial goals, and
personal preferences influence an individual's risk tolerance.

4.Risk-Return Tradeoff:Generally, higher potential returns come with higher levels of risk. Investors must
decide how much risk they are willing to take on in pursuit of higher returns.
5.Diversification:Diversification is a risk management strategy. By spreading investments across different
asset classes, industries, or geographic regions, investors can reduce the impact of poor-performing assets on
their overall portfolio.

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 TYPES OF RISK:

● Market Risk: The risk associated with overall market movements.

● Company-Specific Risk: Risks related to a particular company, such as poor management or financial
instability.

● Interest Rate Risk: The risk that changes in interest rates will affect the value of fixed-income securities.
Changes in interest rates can affect how much money you get back from certain investments.

● Inflation Risk: The risk that inflation will erode the purchasing power of money.If the prices of snacks
keep going up, your allowance might not buy as many treats. Inflation is like the prices of things going up
over time.

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YOUR
NEXT
INVESTMENT
Unlocking new horizons
BONDS
INTRODUCTION TO BONDS

Bonds are a type of fixed-income

investment where an investor lends
money to an entity, typically a
government or a corporation, in
exchange for periodic interest payments
and the return of the principal amount at
maturity.

1.Definition:

A bond is essentially a loan that an

investor provides to an issuer
(government or corporation) for a fixed
period. In return, the issuer pays periodic
interest, known as the coupon, and
returns the principal amount when the
bond matures
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 INTRODUCTION TO BONDS 1
Bonds are a type of fixed-income investment where an investor lends money to an entity, typically a
government or a corporation, in exchange for periodic interest payments and the return of the principal amount
at maturity.

A bond is essentially a loan that an investor provides to an issuer (government or corporation) for a fixed
period. In return, the issuer pays periodic interest, known as the coupon, and returns the principal amount when
the bond matures.

Key Components:
 Face Value (Par Value): The initial amount of money the bond is worth.
 Coupon Rate: The interest rate paid by the bond, typically expressed as a percentage of the face value.
 Maturity Date: The date when the bond reaches the end of its term, and the principal is repaid.

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 INTRODUCTION TO BONDS 2

Types of Bonds:
 Government Bonds: Issued by governments to raise funds for public projects.
 Corporate Bonds: Issued by companies to fund business operations or expansion.
 Municipal Bonds: Issued by local governments for public infrastructure projects.

Bond Ratings:
Agencies like Moody's and Standard & Poor's assign ratings to bonds based on creditworthiness.
Higher-rated bonds are considered lower risk, while lower-rated bonds may offer higher returns but
come with increased risk.

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 HOW TO INVEST IN BONDS 1
 Determine Investment Goals:
Clearly define your investment goals, risk tolerance, and time horizon. Bonds are often used for income
generation and capital preservation.
 Understand Bond Type: Learn about the different types of bonds available, such as government, corporate,
or municipal bonds. Each type carries its own set of risks and returns.
 Research and Due Diligence:
Investigate the financial health of the issuer by reviewing financial statements, credit ratings, and economic
conditions. Understanding the issuer's stability is crucial.
 Choose a Brokerage Account:
To invest in bonds, you'll need a brokerage account. Research and select a reputable brokerage that offers a
variety of bond options.
 Select Specific Bonds:
Once you've chosen the type of bonds you want, research specific bonds within that category. Consider
factors like coupon rate, maturity date, and credit rating.

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 GOAL SETTING IN INVESTING
For high school students, the importance of goal-setting in investing is particularly significant as it lays the
groundwork for responsible financial habits and long-term wealth-building. Here are some specific reasons why goal-
setting is crucial for high school students entering the world of investing:
1.Financial Education
2.Life Milestones:
High school students may have various short and long-term goals such as funding higher education, purchasing a
car, or even saving for a dream vacation. Understanding the costs associated with these milestones and planning
for them early can make achieving these goals more feasible.
3.Developing Discipline:
Setting and working towards financial goals instills discipline. High school students learn the value of delayed
gratification and the importance of consistent savings and investment habits.
4.Introduction to Investing Concepts:
Goal-setting provides a practical context for introducing basic investing concepts. Students can learn about
different investment vehicles and strategies tailored to their specific goals.

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 GOAL SETTING IN INVESTING
5.Understanding Risk and Return:
Different goals come with different levels of risk tolerance. Through goal-setting, students can grasp the relationship
between risk and return and make informed decisions about where to allocate their funds.
6.Real-World Application:
Goal-setting allows students to apply theoretical financial concepts to real-life scenarios. This practical approach helps
them see the relevance of investing in achieving their personal and financial objectives.
7.Building Confidence:
Achieving smaller financial goals builds confidence. This sense of accomplishment can motivate students to continue
making sound financial decisions and gradually take on more complex investment strategies as they gain experience.
8.Long-Term Wealth Accumulation:
By starting to invest early with specific goals in mind, high school students have the potential for long-term wealth
accumulation. This can set the stage for financial security in adulthood.
9.Life Skills:
Goal-setting is a transferable life skill. The ability to set, plan, and achieve financial goals is valuable not only in
investing but also in personal and professional aspects of life.
10.Adaptability and Flexibility:
As high school students transition to college and then into the workforce, goals may evolve. Learning how to adapt and adjust
financial goals based on changing circumstances is a valuable skill.
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GROUP
ACTIVITY
 THANK
YOU

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