3.12 Modern Investing

Last updated 7 months ago

20 questions

Note from the author:

Instructions

1

Library

3.12 Modern Investing

Last updated 7 months ago

20 questions

Note from the author:

Instructions

Warm-Up

1

Would you be comfortable with a computer algorithm managing your investment portfolio? Why or why not?

EDPUZZLE: Should I Use a Robo-Advisor? 📷12 min
Investing today looks a lot different than it did just a few decades ago due to rapid developments in technology. Robo-advisors are becoming an increasingly popular tool that many people are turning to to manage their investment portfolios. Watch this video and follow your teacher's directions to answer the questions either in your student activity packet or within the EdPuzzle itself.

1

2

1

INFOGRAPHIC: How Micro-investing Works 📷4 min
Like robo-advising, micro-investing is a popular way to bring new investors into the market. Review the infographic to learn more about how it works, then answer the questions.

1

5

ARTICLE: Pros and Cons of Spare Change Investing Apps 📷9 min
Micro-investing can be a good way to introduce someone to investing, but their needs could potentially outgrow the strategy quite quickly. Review the article to learn more about the pros and cons of micro-investing. Then, answer the questions.

1

2

ARTICLE: How Artificial Intelligence is Revolutionizing Stock Investing 📷6 min
Artificial intelligence (AI) is also shaping the world of investing. Read this article to learn how. Then, answer the questions.

1

6

8

1

Warm-Up

1

Would you be comfortable with a computer algorithm managing your investment portfolio? Why or why not?

INFOGRAPHIC: How Micro-investing Works 📷4 min
Like robo-advising, micro-investing is a popular way to bring new investors into the market. Review the infographic to learn more about how it works, then answer the questions.

1

On average, how many purchases would you say you make on a normal day?_______ 

5

Given that number of daily purchases and if your average round-up was $0.50, how much would you end up investing…
Per day?_______ 
Per Month?_______ 
Per Year?_______ 
Does this amount seem high or low to you? _______ And does that affect your opinion of whether or not you might use micro-investing apps?_______ 

ARTICLE: Pros and Cons of Spare Change Investing Apps 📷9 min
Micro-investing can be a good way to introduce someone to investing, but their needs could potentially outgrow the strategy quite quickly. Review the article to learn more about the pros and cons of micro-investing. Then, answer the questions.

ARTICLE: How Artificial Intelligence is Revolutionizing Stock Investing 📷6 min
Artificial intelligence (AI) is also shaping the world of investing. Read this article to learn how. Then, answer the questions.

1

In your own words, explain how AI is impacting the world of investing.

1

Why is it important to use AI as a tool rather than fully allow it to make all investing decisions?

ACTIVITY: RESEARCH: Online Tools and Apps 📷35 min
Now that you’ve taken a look at some of the technology that fuels modern investing, let’s do some research and analyze investing apps available in the market. Follow the directions on the worksheet to complete the activity.

RESEARCH: Online Tools and Apps
35 min
Teacher Tip: This activity is designed to be functional across multiple units, including Checking, Saving, Budgeting, and Investing. Students will complete this activity depending on what unit you are in.
The rise of online tools and apps has provided us with the ability to manage our finances like never before. Whether you’re trying to budget smarter or put more away towards retirement, there’s an app for all kinds of financial goals you want to meet. In this activity, you will conduct research on some of these online tools to discover their features and determine which one(s) you like best!
Part I: Determine Your Unit Category
Follow your teacher’s instructions on which category of apps you will be researching from the table below. Circle or highlight the category.
Checking
Top Peer-to-Peer Payment Apps - Nerdwallet
Make Paying Easier with the Best Payment Apps - Money Under 30
Saving
The Best Money Saving Apps - Bankrate
Struggle to Save Regularly? Tools That Turn Loose Change into Savings - The Penny Hoarder
Budgeting
Buy Side Awards: Best Budgeting Apps - Wall Street Journal
The Best Budget Apps - Nerdwallet
Investing
Best Investment Apps - NerdWallet
10 Best Investment Apps - Bankrate
Part II: Research
Use the resources listed above for your category to select 3 apps you want to research in more detail. Then, conduct your own research to access additional resources and fill out the table for each app. While doing your research, think about the following questions:
Is there an age requirement to use this tool?
Is there a minimum amount of money or accounts you must have to use this tool?
Does the tool work with specific banks/accounts only or can you use it regardless of your bank?
Is the tool online only, mobile only, or does it work on both computers and mobile devices?
Who owns the tool? How long has the tool existed? What is the tool’s reputation?
Who is the target customer for using this tool? How many customers, clients, or users does this tool have?
What security or anti-fraud measures does this company take to protect their users?

6

App #1 Name:_______ 
Primary Purpose & How the App Works:_______ 
Requirements you must meet
to use this app:_______ 
How does the company
make money?_______ 
Pros:_______ 
Cons:_______ 

6

App #2 Name:_______ 
Primary Purpose & How the App Works:_______ 
Requirements you must meet
to use this app:_______ 
How does the company
make money?_______ 
Pros:_______ 
Cons:_______ 

6

App #3 Name:_______ 
Primary Purpose & How the App Works:_______ 
Requirements you must meet
to use this app:_______ 
How does the company
make money?_______ 
Pros:_______ 
Cons:_______ 

8

Part III: What Do You Think?
Which of the apps you researched would you use? _______ Why this one/these ones?_______ 
Compare your answer to #1 with a partner. Which app(s) did they choose and why?_______ 
What top 3 criteria would you recommend someone use to evaluate an app they are thinking of using?_______ _______ _______  Explain your reasoning._______ 
Why do you think online financial tools and apps have become so popular?_______ 

Investors report this as being one of the biggest downfalls of robo-advisors when compared to human managers:

Higher Fees

Lack of Personal Touch

Lower Returns

Harder to Use

Which of the following BEST explains how a spare-change app works to invest your money?

The app transfers a small amount of money from your savings account to your checking account each month

The app rounds up purchases you make through your bank account and automatically invests your change

The app adds money to your checking account to make your balance a whole number

The app transfers a small amount of money from your savings account to an investment account each month

With micro-investing, you are...

Investing large amounts of money over short periods of time

Manually rebalancing your investments to reach your goals

Delaying investing until you have a large sum of money

Investing small amounts of money consistently into the market

What is meant by the term "robo-advisor?"

An app that you download and access from your smart device to manage your investments

A robot artificial intelligence who is trained to run an investment brokerage better than humans

A set of computer programs that automatically makes adjustments to finance portfolios

A fund manager who copies the same investments with every client so often it seems robotic

What advantages do robo-advisors have over their human counterparts? (Choose TWO)

They are not subject to the same government restrictions as human advisors

They typically charge much lower fees than the average human advisor would charge

They can perform tedious tasks far more frequently than a human advisor would have time to do

They have access to better investment choices than human advisors are allowed to invest in

TRUE or FALSE Robo-advisors are not a good choice because they just match the market and most professional managers are able to beat the average market returns.

True

False

Which of these investors might want to choose a human over a robo-advisor?

Marcus is just starting to invest a little from each of his paychecks, so he doesn't have a very large balance but he's ok with his investments having average returns

Hera wants to invest her money and not have to think about making a lot of decisions week to week or month to month

Deron is unsure where he wants to invest and nervous about losing money, so he'd like to learn more about his choices to build his confidence

Kamilah is a big fan of efficiency and would prefer her investment process to be automatic to save her time and wants the lowest fees she can get

Which of these statements about robo-advised investing is TRUE?

You have to choose between human connection or robo-advisor automation because it's impossible to find a brokerage that can offer a little of both

Some robo-advisors can be customized to account for your specific investment values like renewable energy or sustainable industries

While robo-advisors can make investing much simpler and more convenient, they rarely perform better than humans in the long-run

Robo-advisors are pretty much all the same, so you never have to worry about how they work or that they might change

On average, how many purchases would you say you make on a normal day?_______ 

Given that number of daily purchases and if your average round-up was $0.50, how much would you end up investing…
Per day?_______ 
Per Month?_______ 
Per Year?_______ 
Does this amount seem high or low to you? _______ And does that affect your opinion of whether or not you might use micro-investing apps?_______ 

When it comes to fees, micro-investing apps are beneficial because:

They always have low fees

They have relatively low fees until you reach a $5,000 balance

They don’t have any fees

You can deduct the fees from your taxes

Since you’re usually investing less than a dollar at a time, one of the downfalls of micro-investing apps is…

The IRS will be suspicious if you don’t invest more

It’s not possible to make any money

It’s possible that you won’t invest enough money to reach your goals

You share your earnings with other users of the app

Your friend Ravi wants to start investing. Would you recommend using a micro-investing app? _______ Why or why not?_______ 

In your own words, explain how AI is impacting the world of investing.

Why is it important to use AI as a tool rather than fully allow it to make all investing decisions?

ACTIVITY: RESEARCH: Online Tools and Apps 📷35 min
Now that you’ve taken a look at some of the technology that fuels modern investing, let’s do some research and analyze investing apps available in the market. Follow the directions on the worksheet to complete the activity.

RESEARCH: Online Tools and Apps
35 min
Teacher Tip: This activity is designed to be functional across multiple units, including Checking, Saving, Budgeting, and Investing. Students will complete this activity depending on what unit you are in.
The rise of online tools and apps has provided us with the ability to manage our finances like never before. Whether you’re trying to budget smarter or put more away towards retirement, there’s an app for all kinds of financial goals you want to meet. In this activity, you will conduct research on some of these online tools to discover their features and determine which one(s) you like best!
Part I: Determine Your Unit Category
Follow your teacher’s instructions on which category of apps you will be researching from the table below. Circle or highlight the category.
Checking
Top Peer-to-Peer Payment Apps - Nerdwallet
Make Paying Easier with the Best Payment Apps - Money Under 30
Saving
The Best Money Saving Apps - Bankrate
Struggle to Save Regularly? Tools That Turn Loose Change into Savings - The Penny Hoarder
Budgeting
Buy Side Awards: Best Budgeting Apps - Wall Street Journal
The Best Budget Apps - Nerdwallet
Investing
Best Investment Apps - NerdWallet
10 Best Investment Apps - Bankrate
Part II: Research
Use the resources listed above for your category to select 3 apps you want to research in more detail. Then, conduct your own research to access additional resources and fill out the table for each app. While doing your research, think about the following questions:
Is there an age requirement to use this tool?
Is there a minimum amount of money or accounts you must have to use this tool?
Does the tool work with specific banks/accounts only or can you use it regardless of your bank?
Is the tool online only, mobile only, or does it work on both computers and mobile devices?
Who owns the tool? How long has the tool existed? What is the tool’s reputation?
Who is the target customer for using this tool? How many customers, clients, or users does this tool have?
What security or anti-fraud measures does this company take to protect their users?

App #1 Name:_______ 
Primary Purpose & How the App Works:_______ 
Requirements you must meet
to use this app:_______ 
How does the company
make money?_______ 
Pros:_______ 
Cons:_______ 

App #2 Name:_______ 
Primary Purpose & How the App Works:_______ 
Requirements you must meet
to use this app:_______ 
How does the company
make money?_______ 
Pros:_______ 
Cons:_______ 

App #3 Name:_______ 
Primary Purpose & How the App Works:_______ 
Requirements you must meet
to use this app:_______ 
How does the company
make money?_______ 
Pros:_______ 
Cons:_______ 

Part III: What Do You Think?
Which of the apps you researched would you use? _______ Why this one/these ones?_______ 
Compare your answer to #1 with a partner. Which app(s) did they choose and why?_______ 
What top 3 criteria would you recommend someone use to evaluate an app they are thinking of using?_______ _______ _______  Explain your reasoning._______ 
Why do you think online financial tools and apps have become so popular?_______ 

Investors report this as being one of the biggest downfalls of robo-advisors when compared to human managers:

Higher Fees

Lack of Personal Touch

Lower Returns

Harder to Use

Which of the following BEST explains how a spare-change app works to invest your money?

The app transfers a small amount of money from your savings account to your checking account each month

The app rounds up purchases you make through your bank account and automatically invests your change

The app adds money to your checking account to make your balance a whole number

The app transfers a small amount of money from your savings account to an investment account each month

With micro-investing, you are...

Investing large amounts of money over short periods of time

Manually rebalancing your investments to reach your goals

Delaying investing until you have a large sum of money

Investing small amounts of money consistently into the market

What is meant by the term "robo-advisor?"

An app that you download and access from your smart device to manage your investments

A robot artificial intelligence who is trained to run an investment brokerage better than humans

A set of computer programs that automatically makes adjustments to finance portfolios

A fund manager who copies the same investments with every client so often it seems robotic

What advantages do robo-advisors have over their human counterparts? (Choose TWO)

They are not subject to the same government restrictions as human advisors

They typically charge much lower fees than the average human advisor would charge

They can perform tedious tasks far more frequently than a human advisor would have time to do

They have access to better investment choices than human advisors are allowed to invest in

TRUE or FALSE Robo-advisors are not a good choice because they just match the market and most professional managers are able to beat the average market returns.

True

False

Which of these investors might want to choose a human over a robo-advisor?

Marcus is just starting to invest a little from each of his paychecks, so he doesn't have a very large balance but he's ok with his investments having average returns

Hera wants to invest her money and not have to think about making a lot of decisions week to week or month to month

Deron is unsure where he wants to invest and nervous about losing money, so he'd like to learn more about his choices to build his confidence

Kamilah is a big fan of efficiency and would prefer her investment process to be automatic to save her time and wants the lowest fees she can get

Which of these statements about robo-advised investing is TRUE?

You have to choose between human connection or robo-advisor automation because it's impossible to find a brokerage that can offer a little of both

Some robo-advisors can be customized to account for your specific investment values like renewable energy or sustainable industries

While robo-advisors can make investing much simpler and more convenient, they rarely perform better than humans in the long-run

Robo-advisors are pretty much all the same, so you never have to worry about how they work or that they might change

When it comes to fees, micro-investing apps are beneficial because:

They always have low fees

They have relatively low fees until you reach a $5,000 balance

They don’t have any fees

You can deduct the fees from your taxes

Since you’re usually investing less than a dollar at a time, one of the downfalls of micro-investing apps is…

The IRS will be suspicious if you don’t invest more

It’s not possible to make any money

It’s possible that you won’t invest enough money to reach your goals

You share your earnings with other users of the app