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Principles of Finance

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How to Double Your Money in Seven Years

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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

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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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