Great work learning about investing! Now let's dive deeper. When you invest money, you're buying different types of assets called "asset classes."
Think of asset classes like different categories of investments - each with unique characteristics and behaviors.
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Can you name any types of investments you've heard of before?
The most common asset class is stocks. When you buy a stock, you're actually buying a tiny piece of ownership in a real company!
If you own Apple stock, you literally own a small fraction of Apple Inc. - the company that makes iPhones.
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In one phrase, what do you actually own when you buy a stock?
Here's why people buy stocks: when companies do well and make more profits, their stock prices typically go up. As a part-owner, you benefit from that success!
For example, if Apple invents a revolutionary new product, more people might want to buy Apple stock.
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What might cause a company's stock price to go down?
Some well-known stocks include Apple, Microsoft, Amazon, Google, and Tesla. You can buy shares of these companies through investment accounts.
One share of Apple might cost around $200, while one share of Amazon might cost $3,000 (prices change daily).
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Which of these companies would you be most interested in owning?
But stocks are just one type of asset class. There are also bonds (lending money to companies or governments), real estate, commodities like gold, and more.
Each asset class behaves differently during various economic conditions - some go up when others go down.
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Why might it be smart to own different types of assets?
