Question: There is much pressure on individuals to save for retirement. Where do you start? If you have money available to put away for retirement, where should you invest it to get the best return? There are many investment options available to today's workers. One kind of fund is called an Individual Retirement Account (IRA). There are several forms of IRAs. A deductible IRA means that the investor does not have to pay tax on the money deposited or on the interest earned on the account until it is withdrawn at retirement. A non-deductible IRA means that the investor does pay tax on the money deposited but does not pay tax on the interest earned on the account until it is withdrawn at retirement. A Roth IRA is one where the person pays tax on the amount deposited but never has to pay tax on the interest earned on the account. A certificate of deposit (CD) is an investment product offered by banks. Interest is paid on the CD on a specific date in the future. The term of the CD can range from 30 days to more than five years. If you want to share directly in the success of a corporation, you may purchase shares of stock in that company. Each share of stock represents an ownership interest. Your investment can reward you either in the form of dividends or by an increase in the value of your shares of stock. Another investment is to purchase the bond of a company or government entity, which is similar to a loan that pays periodic interest. The repayment of the principal amount occurs at a specified date in the future. If you want to invest in stocks and bonds but don't want to deal directly with each company, you can invest in a mutual fund, which means you buy shares in an entity designed to collect the investments from many investors. In turn, these funds are invested in the stocks and bonds of many companies by fund managers.
Activities: 1. Contact a financial planner. Ask his or her advice on how much is needed to start investing and what types of investments are appropriate for someone your age. Prepare a written summary of your findings.
2. Pick two publicly traded companies in the same industry. Track each company's stock price daily for two weeks. Summarize your findings in a chart or graph.