Investing for the future can be very confusing and risky. The stock market is the most risky investment because of price fluctuation and confidence in the market. When there is optimism, prices rise and we say we are in a bull market. When pessimists dominate, prices fall and we say we are in a bear market. Check out the two Tampa Bay Times articles below: Bull and Bear. What are some of the factors that can increase or decrease confidence in the market? How can news or world events impact stock prices?
Bulls and Bears aren't the only animals of Wall Street. Have you heard of chickens? They are afraid of the market. What about wolves? Check out how the movie the Wolf of Wall Street got caught up in an investment scandal in the article below. How can you avoid wolves?
SS.8.FL.5.1 Describe the differences among the different types of financial assets, including a wide variety of financial instruments such as bank deposits, stocks, bonds, and mutual funds. Explain that real estate and commodities are also often viewed as financial assets.
SS.8.FL.5.5 Explain that the rate of return earned from investments will vary according to the amount of risk and, in general, a trade-off exists between the security of an investment and its expected rate of return.
SS.912.FL.5.3:Discuss that buyers and sellers in financial markets determine prices of financial assets and therefore influence the rates of return on assets.
SS.912.FL.5.4:Explain that an investment with greater risk than another investment will commonly have a lower market price, and therefore a higher rate of return, than the other investment.
SS.912.FL.5.6:Describe how diversifying investments in different types of financial assets can lower investment risk.
SS.912.FL.5.7:Describe how financial markets adjust to new financial news and that prices in those markets reflect what is known about financial assets.
Created by Deborah Kozdras and Brittany Sampson