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Introduction to Successful Investing

National Labor College’s InvestorEducation for Working Families

Presents

Introduction toSuccessful Investing

Adapted with permission rom AFSCME

National Labor College — Investor Education Project

This program is made possible by a generous grantrom the FINRA Investor Education Foundation.The FINRA Investor Education Foundation supportsinnovative research and educational projects thatgive investors the knowledge, skills and tools neces-sary or nancial sucess throughout lie. For detailsabout grant programs and other FINRA Foundationinitiatives, visit www.nraoundation.org.The National Labor College (NLC) is one o a kind,the only college in the United States with an exclu-sive mission to serve the educational needs o thelabor movement. It is an activist institution madeup o students, aculty and alumni who togetherorm a learning community based on a commonunderstanding o the world o work and the ecol-ogy o the labor movement. The College respectsthat its student body is made up o experienced,highly skilled working adults who have multiplecommitments to amily, job, union and community.In its academic programs, the NLC honors higherlearning that takes place both inside and outsidethe collegiate community.

Mission Statement

By establishing the physical and intellectual spaceor the labor movement to imagine its uture, themission o the NLC is to make higher educationavailable to workers, to prepare union members,leaders and sta or the challenges o a changingglobal environment; and to serve as a center orprogressive thought and learning.Copyright 2011 All rights reserved.National Labor College10000 New Hampshire Ave.Silver Spring, MD 20903Phone: (301) 431-6400

For more inormationon investing, go to ourwebsite at nlc.edu.

Introduction to Successful Investing

Contents

Acknowledgments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4Foreword ................................................................5Introducing NLC’s Investor Education or Working Families Program .......6

Part I: Getting Started

Chapter 1: Your Financial Foundation .....................................7Chapter 2: Why Invest? ..................................................14Chapter 3: Risky Business ...............................................19Chapter 4: Pulling It All Together .........................................25Chapter 5: Tax-Advantaged Investing ....................................32

Part II: Investing in Stocks and Bonds

Chapter 6: Stock Market Basics ..........................................37Chapter 7: Buying and Selling Stocks ....................................41Chapter 8: Understanding Bonds ........................................46

Part III: Investing in Mutual Funds

Chapter 9: Mutual Fundamentals ........................................52Chapter 10: Finding a Place or Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58Chapter 11: Types o Mutual Funds ......................................61Chapter 12: Mutual Fund Mechanics .....................................64Chapter 13: Responsible Investing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67Further Resources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70