Economics (Period 4) Assignments

Stock Market for Beginners Video – Scavenger Hunt

In the video we watched, Nate O’Brien covered a lot of topics related to getting started investing in the stock market.  With a partner, look for the following items and/or answer the questions.  You can rely on what you remember from watching the video or look the information up online.

1. In your own words, what is a stock and what is the purpose of companies offering shares of stock?
2. O’Brien held a copy of The Intelligent Investor, which was also a guide used by Warren Buffett. Look this book up on Amazon or elsewhere and list the author, give a brief description of it and tell what kind of reviews it receives.
3. Describe the following: Index Fund, IRA, 401K, Mutual Fund, ETF
4. What is dollar cost averaging and why is it used?
5. What is the Standard and Poor (S & P) 500 and how is it used by investors?
6. Look up the following online and describe what it takes to get started investing with each one: M1, Robinhood, TD Ameritrade, E Trade, Charles Schwab
7. What is a dividend? What are pros and cons of dividends?
8. What is the difference between Fundamental Analysis and Technical Analysis? Why does O’Brien recommend most investors focus on Fundamental instead of Technical?
9. What are some ways an investor can research a company prior to buying its stock?
10. Discuss the concept of “risk vs reward” and explain how it needs to be followed by average investors.

Here is a link to the YouTube video if you want to pursue it further.  I am not an endorser of O’Brien or any of the services or stocks discussed here.  I am only presenting this as a way for students to get some starting information about stocks and investing:

https://www.youtube.com/watch?v=dFAiChOmoGI

Analysis Questions:

1. What are the opposing ideas in these two videos?
2. Should one of the arguments we heard carry more weight than the other? If so, which one? Why?
3. John Stossel said that government experts originally claimed that the ongoing inflation was “transitory.” What did they mean by this?
4. John Stossel said, “Prices change because of supply and demand.” In basic terms, what is the law of supply and demand?
5. More Perfect Union argued that companies are using inflation as an excuse to raise prices, and used their increased profits as evidence of this. Can you think of any alternative explanation for this?
6. In the Stossel video, David Henderson said, “[I]f government’s spending more money, that’s more money chasing too few goods.” What did he mean by this?
7. John Stossel said, “[B]ecause government has no money of its own, extra spending means politicians must borrow more, tax more, or create money out of thin air by printing it.” What did he mean when he said government has no money of its own?
8. More Perfect Union used the term “profiteering.” What is profiteering?
9. John Stossel explained that inflation devalues any money people have in savings. Why is this?
10. In regards to raising taxes on corporations, John Catsimatidis said that “corporations are just going to pass it on to the consumer.” What did he mean by this?
11. If More Perfect Union is correct that businesses are raising prices simply because people will pay more, what can we do about this? Should we do anything about it? Is it a fair business practice? Why/Why not?
12. If John Stossel is correct that government spending is driving inflation, what can we do about this? Should we do anything about it? Is the cost of inflation worth the additional government spending?
13. Have you noticed inflation in your own life? Has it impacted you or your family? If so, how?
14. Did you have an opinion of inflation before watching these videos? If so, what was it? Has your opinion changed? If so, how? What did you learn from either video that affects your views of inflation?