Enterprise Lesson 6

1
Play it safe or risk it all?

• Enterprise Lesson 6
• Dont put all your eggs in one basket?
• Aim to understand what risk is and how to manage
  it

2
For starters

• What does it mean to put all your eggs in one
  basket? Think of times youve done this. What
  were the outcomes?
• Extension do you agree with this saying? Why or
  why not?

3
By the end of today, you will be able to

• explain risk and diversification.
• analyse the advantages and disadvantages of
  diversification.
• come up with a trading strategy which takes risk
  into account.

4
Remember your mission

• This week well learn ways to increase the
  likelihood of making a return.
• What does it mean to risk? Write your definition
  and give an example.
• Extension do you like to take risks? When are
  they worth taking?

To make as much money as possible by investing
imaginary money in celebrity shares.
To make as much money as possible by investing
imaginary money in celebrity shares.
5
Risk

• In business risk is the likelihood of loss or
  less-than-expected returns.
• For homework you picked a celebrity that you wish
  you hadnt invested in. Did they make a loss or
  less-than-expected returns? Why did you invest in
  them?
• Extension compare the return on your best
  performing and your worst performing shares this
  week. What was the difference? Why did you not
  just invest in the better performing shares?

6
How can we keep risk low? Some hints!

• Can you lose money on cash not invested?
• If the price of one celebrity goes down, does
  that mean the price of all your investments will
  go down?
• If you invest in a celebrity with a potential
  dividend, can you expect a guaranteed return?
• How can the Daq Diary be helpful?

7
Final hint extension activity/homework

• Behold the fool saith, Put not all thine eggs
  in one basket which is but a manner of saying,
  Scatter your money and your attention but the
  wise man saith, Put all your eggs in the one
  basket and WATCH THAT BASKET. Mark Twain
• Complete the worksheet on managing risk. This
  will help you make a safe (or risky? Your call!)
  investment.

8
Invest!

• Use your knowledge of risk to choose celebrities
  that you expect will bring in a low-risk return
  during the week.

9
Celebwork
Track your investments closely. At the end of the
week explain whether your shares behaved as
expected, or whether there were any surprises.