25 Investing Basics
Part I: Read & Categorize
This Business Insider article describes 25 Things to Know About Investing by Age 25. You’ll notice we’ve numbered the
Things to Know. As you read the article, write the corresponding number in one of the boxes below, based on your
current knowledge level of the topic. There is NO expectation that you should already know all of this info!
CATEGORY 1: I already know all CATEGORY 2: I’ve heard of this, but CATEGORY 3: I don’t know anything
about this. I’m no expert. about this.
1. Savings account 1. Retirement savings 1. Investments are one of the
2. Investing is always a risk 2. Bonds are loans only ways to keep up with
3. Stocks are equity in a 3. Charges Fees inflation
company 4. Pay taxes due to investments 2. A security is a financial
4. Stocks track the stock market 5. Get a tax break instrument
5. Sometimes you’ll fail 6. Getting too attached to a 3. Diversification
6. Starting early stock is dangerous 4. ROI calculates investments
7. Don’t invest money you 7. Past market trends aren’t 5. Don’t need to pick stock by
need reliable stock
8. Don’t need to check 8. Long-term goals are 6. Hot stocks
constantly important to focus on
9. No one can reliably predict
the market
10. You don’t have to do it
yourself
11. You don’t know what you
don’t know
Part II: Learn with a Partner
A. First, find one item that you’ve put in Category 1 that your partner did not. Explain your understanding of that
fact to your partner, to the best of your ability. Now, switch roles. Your partner should find one item in their
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Category 1 that you didn’t include there and explain it to you. **If you didn’t put anything in Category 1, pick the
item in Category 2 you feel you know best.
a. Add 1-2 sentences summarizing what they explained to you below
b. For example: Term or idea - explanation
c. Past Market Trends- Although you can track certain patterns and behaviors to try and understand how
the market works, you can never really predict what will happen. Because of this, it is not a reliable
factor to base your investment decisions.
B. Find one item that you know nothing about in Category 3 that your partner understands and have him or her
explain it to you. Now, switch roles.
a. Add 1-2 sentences summarizing what they explained to you below
b. For example: Term or idea - explanation
c. Hot stocks- Even though one stock may be “hot” at the moment, it doesn’t mean it will stay that way.
Jumping into a stock just because it’s doing well isn’t smart. It’s important to look at the long term and
do research on what you’re investing in before following the crowd.
C. Finally, find one investing concept that you BOTH put into category 3 and do some quick online research to find a
resource that explains the topic better. Both of you should be looking for resources, and then, based on what
you find, write a brief explanation of your new understanding in the box below(3-4 sentences):
Investing has proven to be a safe way to keep up with inflation. When you invest your money in
interest-paying assets such as stocks, bonds, and other investment opportunities, it helps keep your money
safe from the effects of inflation. If you can keep its growth rate higher than the inflation rate, then there
shouldn’t be any issues regarding your money.
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