Unit 10 Learn how to manage your Wealth

II. Basic Listening Practice

Script

W:Let me recommend my broke to you. He’s really done well in the stock market over the last few years.

M: the real question is this: How have you done by taking his advice?.

Q: What does the man mean?

1.      Script

M:Many investors jump on IPOs, hoping to get rich by getting into a stock early, before it goes up.

W:But isn’t that a bit like buying a book without reading it? I mean, what if it doesn’t go up.

Q: What is the woman’s opinion??

3. Script

W: The Dow was down again today. It’s hard to make money when high fuel prices are killing the stock market.

M: There’s still money to be made. If you bought oil futures three months ago, you’d be smiling right now.

Q: What can we learn from the dialog?

4. Script

M:I can’t wait to get back to my computer. Online share trading has totally changed the stock market and the lives of investors, Hook up to the Internet and be your won broker!

W:Yes, you can cut out the middleman now. For about $500, you can open an account and begin buying and selling shares at your own home, 24 hours a day?

Q:  Which of the following is true if people want to trade shares on the Internet?

5. Script

W:  Hold onto your hat? We’ll be rich. I’m buying shares in a new company. The initial public offering of shares is on Friday.

M:  You can’t buy IPO shares unless you have a big active account with a broker. The days of dotcom fortunes from IPOs are over.

Q: According to the dialog, what is the precondition for buying IPO shares?

 

III. Listening In

Task 1: Saving and investment

Script

Within personal fiancé, the act of saving means preservation of money for future use. A deposit account is typically used to hold money for future needs such as buying a car, going out on vacation and spending money on children’s education. On the other hand, money used to buy shares or any asset where there is some risk is called an investment. The distinction between saving and investment is important, as investment, unlike cash savings, has the risk of a capital loss. Cash savings accounts are considered to have almost no rish. In the United States, all banks are required to have deposit insurance, typically issued by the Federal Deposit Insurance Corporation. In extreme cases, a bank failure can cause deposits to be lost as it happened at the start of the Great Depression. However, since the Federal Deposit Insurance Corporation was created, no deposits in the United States have been lost due to a bank failure.

In many instances the terms saving and investment are sued interchangeably. For example , banks may just use deposit saving for investment in the market.

To know whether an asset of yours is saving or an investment, you should ask yourself, “Where is my money invested?” if the answer is cash, then it is savings; if it is a type of asset which can fluctuate in value, then it is investment. There may be problems in saving money for the long term. In about 30 years its value will decrease to about a half of its original value due to inflation, if there is a tow to three percent inflation rate.

 

Task 2: Bank Saving or real estate?

Script

M: We have $250,000 from your uncle’s estate after he died. What would you like to do with it?

W: Spend it on new clothes, silly! Seriously, I don’t know. Shouldn’t we just put it in the bank? I want it to be safe.

M: Well, interest rates are pretty low at the present time, but we could put some of it into a savings certificate—a GIC

W: What is a GIC? Is that like some sort of stock?

M: No, it’s a Guaranteed Investment Certificate. The bank will pay a specified rate—right now about two percent—to use our money for a year. It’s safe, but doesn’t earn much.

W:  Well, maybe we should put $50,000 into that.

M: Or even$100,000. People are saying that interest rates will go up eventually, and when they do, we can move our money into something more lucrative.

W: What about the rest?

M: Well, maybe we could invest in real estate. Use some of that money as a down payment on a condo which we could rent out.

W: Do you really think real estate is safe? Look at the way housing prices have fallen. Hasn’t the bubble burst?

M: Mark Twain once said: “Buy land; they’re not making it any more.” I think property will hold its value in tough times.

W: But there’s so much overdevelopment. It seems there are condo complexes everywhere looking for buyers.

M: But if we get into one at a good price, we will do well. The property will appreciate over time, faster than the GICs

W: OK. We can call an agent, and have a look at what is available.

 

 

Task 3: A part-time job or a loan?

Script

Susan: Hi, Mark, how about going out for dinner and a movie? Have a break from the books!　

Mark: No. Susan. I have a paper due next week, and I’ve got two shifts at work staring me in the face

Susan: That’s too bad. How can you afford to take time away from your studies in order to work?

Mark: Really, I am in a dilemma. I can’t afford to, but I can’t afford not to either.

Susan: I guess I understand, but I chose to go the other way: Each year I take out a student loan at a zero interest to carry me through the year. Then my only burden is my studies.

Mark:  Yeah, my work is eating into my GPA. How about your debt?

Susan: Well, I have managed to get a position in a shipping company during the summer vacation, so that I can keep down some of my debt.

Mark: And you’re studying shipping logistics, so the work you do during the summer will be giving you real, meaningful work experiences.

Susan: That was my intention. I can see if it is the sort of career that I want for myself.

Mark: I understand your point. But the idea of carrying that amount of debt concerns me. I would really restrict my options.

Susan: You know, the government encourages students to complete university by making loans available to them at a low interest rate. I think I’m making good use of the government's money.

Mark: Maybe you are right. And in the end, when you graduate, you will earn good money, pay more taxes, and contribute to the economy.

Susan: Right. Maybe I will visit the bank and discuss getting a loan.

 

 

V. Let’s Talk

Script

 

 

VI.                       Further Listening and Speaking

Task 1: Investing in the stock market

Script

Gregory: I’ve been thinking about getting into the stock market, but I don’t know where to start. What do you know about buying stocks?

Sylvia: Well, I know a little about it. Now is probably a good time to invest. The market is low and prices are probably pretty good.

Gregory: So you mean it’s high time to enter the market? What kind of stock do you suggest?

Sylvia: I won’t recommend any specific stock. You have to make the decision on your own. If you want to make money quickly, you could try speculating.

Gregory: What do you mean by speculating?

Sylvia: You buy stocks that go up quickly and then sell quickly for a fast profit.

Gregory: Isn’t that risky? Stocks that go up fast also tend to go down fast.

Sylvia: You just have to guess how high they’ll go. And then sell when you think they’re about to come down. If you guess right, you can make lots of money in the twinkling of an eye.

Gregory: But I hear that many people guess wrong. When they think the market is already very low, they start to buy. However, the market continues to drop.

Sylvia: In that case you will lose your shirt. But to make money, you have to take chances.

Gregory: Hmm, I’m not much of a gambler.

Sylvia: So you can probably try blue-chip stocks for a guaranteed return on your investment.

Gregory: That sounds right up my alley.

 

Task 2: What if I own stocks?

Script

When a person buys stocks in a company, that person becomes a shareholder of that company. Stockholder is another name for shareholder. A shareholder can be called an investor of the company. When that company makes money, the value of the company’s stock often increases. That’s because more people may become interested in investing in the company. Sometimes, shareholders receive a dividend, which is part of the company’s earned income, in the form of a cash payment.

 

Some people try to make money by buying and selling stocks. Stock prices can move up and down. Shareholders may make money or lose money by selling stocks that they own, depending on whether the price has gone up or down since they bought their shares. A company’s stock price may be affected by market or economic conditions. For example, let’s say that BCD Enterprise is a software company that has introduced a new video game into the market. If that game is a hit, sales of the video game could boost the company’s earnings. Because of BCD’s potential to grow, its stock may be viewed as an attractive investment and its stock price may go up as more people buy its shares. On the other hand, let’s say the video game that BCD introduced is a flop. Or, it could be a good game, but BCD introduced it at a time video game that BCD introduced is a flop. Or, it could be a good dame, but BCD introduced it as a time when people are spending less on leisure products, and hardly anyone is buying the game. So BCD might lose money because of this new product. Then the stock price for BCD may go down if a number of shareholders decide to sell their shares.

 

 

 

 

Task 3: Hedge Funds

Script

Susan：Hey， mike, you look like you haven’t slept. What’s up

Mike：It’s certainly not the market, Susan. I have been following the roller coaster ride of my stock portfolio and it’s deriving me mad.

Susan：Well, Mike, roller coasters go up as much as they go down. But they always finish at the bottom, don’t they?

Mike：That’s what frightens me… What do you do with your money?

Susan：Stocks are pretty hard to predict, I agree with that. That’s why I’ve put my money into hedge funds.

Mike：Hedge funds? I don’t know that stock… What do they make?

Susan：Hedge funds do not make hedges, Mike. A hedge is a way of reducing rish. A hedge fund creates a stock portfolio that tries to balance the market activity.

Mike：But the market seems to be just too unpredictable to be balanced. It goes up only to go down.

Susan：That’ what a financial advisor named Jones decided over 50 years ago, and that’s why he created the first hedge funds.

Mike：How do they work?

Susan：Analysts examine stocks to assess which ones are likely to go up, and which will likely go down.

Mike：But it’s hard to know which way a stock will go.

Susan：Mike, you are not an expert, and the key word is “likely”. Hedge fund managers buy stocks that will likely go up and they sell stocks that will likely go down.

Mike：I see your point. If I leave my money with a hedge fund manager, perhaps he can trade my stocks in a more profitable way.

Susan：That’s right.