Your assignment today is to come up with a creative idea for students to learn a specific economic
concept (or book chapter). For example, you may have students join a virtual stock market game where they buy imaginary stocks in a real company, then monitor the stock prices in a classroom competition. You may have students create a virtual company with an imaginary (or real) product, and focus on improving sales or expanding their customer base. You may want students to create a series of graphs demonstrating changes in a companies Production Possibility Frontiers.
You can either create your own or research interesting projects on the Internet. Whichever you choose, just make sure it covers a topic in Economics (see your textbook) and it includes specific instructions that I [or another Economics teachers] could implement in future classes.
THIS PROJECT IS DUE FRIDAY AND COUNTS AS THE COURSE FINAL EXAM
You probably remember our discussions of the importance of diversification when investing. It follows the idea of "Don't put all your eggs in one basket" -- meaning if you put all of your eggs [investments] into one basket, and that basket gets destroyed, you lose everything. By putting a some of your eggs in one basket [savings], some of your eggs in another basket [individual stocks], some of your eggs in another basket [mutual funds] and some of your eggs in another basket [real estate] -- you are more stable in the long run.
Today we are going to begin discussing Dollar Cost Averaging -- a process by which you buy a regular dollar amount worth of something [i.e. a mutual fund] at regular intervals [i.e. monthly] regardless of the price at that time.
For example: Imagine that you are going to invest $100 per month in a certain stock. This month the stock is at $10 per share so you will be able to buy 10 shares. Next month the stock is at $11 per share so you will only be able to buy 9.09 shares. The following month the stock drops to $9 per share so you are able to get 11.11 shares. In month 4 the stock is up to $16 so you can only afford 6.25 shares. You now own 36.25 shares of stock worth an estimated $580 -- and you have invested only $400. Obviously if stocks suddenly dropped back to the $10 per share where you started, your stocks would only be worth $362.50, but the stock market has a pretty strong track record of upward movement over time. Even so, don't forget the concept of diversification... and don't invest money you can't afford to lose.
Now I always suggest consulting multiple sources of information prior to investing. Here's an example of reasons NOT to use Dollar Cost Averaging. I disagree with his reason, but it's good to listen to varied opinions.
And Mark Cuban talking about why NOT to diversify:
