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Principles of Finance

Video Activity

Principles of FinanceVideo Activity

How to Double Your Money in Seven Years

In this video, Jim Cramer explains how compounding can help investors build and preserve wealth. He provides suggestions for how young people can use the stock market to build financial independence.

1 .
According to Jim Cramer, if you invest $1,000 in the S&P 500, how much can you expect your investment to be worth in 35 years?
2 .
Gather data over the past 10 years for the level of the S&P 500. How many of those years did the S&P 500 have a return of at least 10%? If you had invested in $1,000 in an S&P 500 index fund 10 years ago, would you have doubled your money yet? Is your answer consistent with Jim Cramer’s message?

John Bogle and the Buy-and-Hold Strategy

In this video, the legendary investor Jack Bogle, founder and former CEO of Vanguard, discusses strategies for investors.

3 .
When discussing following a buy-and-hold strategy, in which an investor makes a purchase and holds the same investment for the long term, Bogle says that the success of such a strategy depends on what is bought. What distinction does Bogle make between buying and holding an individual stock and buying and holding a broad-based index fund?
4 .
How would you describe Bogle’s attitude toward risk in the stock market? Do you agree with this attitude? Why or why not?
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