In this project, I learned that there is a difference between saving your money in a savings account and investing your money. A savings account earns you less money than investing into a company because the annual rate of return is low in comparison to investment accounts. After looking at all the blog posts, I can conclude that most local banks, such as Wells Fargo and Chase have a low annual rate of return of about 0.01%. You earn a lot more money in investment accounts mainly because the annual rate of return is higher than a savings account. It is also easy to distinguish between the two because a savings account pretty much earns about the same amount of money every year, which is linear. On the other hand, an investment account earns you more money every year (if it doesn't require any risks), exponential. In this project, we assume that the company has the same annual rate of return every year.
However, in real life situations, your money in a local bank is a lot safer than investing your money. Why? The stock may drop dramatically at a certain point, where you can lose all your money, but if it succeeds or if the company does well, you will earn lots of money, something you'd never get from a local bank.
Hello Accelerated Math Students! As part of your Quarter 2 investment project, you will post on this blog using your holiday pseudonym. You will also comment on two other posts. EXTENDED DUE DATE: SUNDAY DECEMBER 11, 2016. The grades are now finished for the blog.
From your blog, I have learned that putting money into a savings account is safer than in an investing account. I've also learned that you earn more money in a investing account than a savings account, but if you were to invest in a company that is rising, can you clarify how stock investors may lose their money?
ReplyDeleteIn response to your comment, it depends on how the company does on the stock market. When a company is rising, it is certain that the investor will gain money, not lose money. However, if the company does poorly, investors may lose their money.
ReplyDeletehttp://www.investopedia.com/ask/answers/06/marketcrash.asp
To add on to your post, stock prices may go up or down depending on the amount of people who want to buy stocks compared to the amount of people who want to sell stocks, also known as supply and demand. Investopedia states, "If more people want to buy a stock (demand) than sell it (supply), then the price moves up. Conversely, if more people wanted to sell a stock than buy it, there would be greater supply than demand, and the price would fall."
ReplyDelete