Objectives

Students will understand the dynamics of saving and investing.
Students will identify the long-term investment potential associated with the stock market, focusing on fundamentals such as diversification, risk/reward, and investor behavior.
Students will identify and define the types of financial risks, including inflation, deflation, and recession.

Saving and Investing: Professional Athletes
Watch this video about how professional football players struggle with saving.

How to Retire Early

Watch this Two Cents video on the FIRE movement and retiring in your 30’s.

Investing Basics

Read this PowerPoint presentation on the basics of investing.

08 Investing (1)

Pyramid of Risk
Observe this pyramid of risk which shows how risky certain commodities are for growing value.

Saving and Investing: Recessions

Read the following article taken from Investopedia:

Understanding Recessions

Since the Industrial Revolution, the long-term macroeconomic trend in most countries has been economic growth. Along with this long-term growth, however, have been short-term fluctuations when major macroeconomic indicators have shown slowdowns or even outright declining performance, over time frames of six months up to several years, before returning to their long-term growth trend. These short-term declines are known as recessions.

What Causes Recessions?

Numerous economic theories attempt to explain why and how the economy might fall off of its long-term growth trend and into a period of temporary recession. These theories can be broadly categorized as based on real economic factors, financial factors, or psychological factors, with some theories that bridge the gaps between these.

The spread of the COVID-19 epidemic and the resulting public health lock-downs in the economy in 2020 are an example of the type of economic shock that can precipitate a recession according to Real Business Cycle Theory. It may also be the case that other underling economic trends are at work leading toward a recession, and an economic shock just triggers the tipping point into a downturn.