BANKIG CONVERSATIONS

A client has come to your brokerage firm for advice about his investments. Explain to him the investment strategies he might want to follow, the nature of the stock market he's facing right now, the economic factors that should influence his decision to buy or sell stocks, and the kinds of stocks that represent a good investment and those that you would not recommend.

yield — rate of return on an investment

growth rate — percentage at which property increases in value

option — choice, alternative

bullish — said of the stock market when prices are rising

bearish — said of the stock market when prices are falling

slowdown — a decrease in industrial production and in other economic activity

inflation — a process of rising prices

double-digit (digit = number) — an amount having two digits

data processing — machines that handle information

high technology — scientific advances applied to new devices, such as computers, calculators

earnings — income (money earned) on an investment or in a business

bargain — an item bought at a price that the buyer considers low

bargain-hunters — said of investors who buy stocks when prices are low (to hunt—to chase animals for food)

collectibles — items such as works of art, stamps, or coins that can be collected (for investment purposes)

works of art — paintings or sculpture (statues)

dealer — person conducting business transaction(for example, a trader, a storekeeper, a broker)

bid — offer of money by a buyer for the purchase of something

auction — sale of property to the person whose bid is the highest

commission — payment for the services of an agent or broker, usually a percentage of the value of the transaction

strategy — plan of action

recession — period of temporary economic decline and unemployment (joblessness)

to appreciate — to increase in value .Investors hope their property will appreciate

stamp — a piece of paper placed on an envelope or package to show that the fee for mailing has been paid

coin — a piece of metal with a certain value that is used as currency

Independent nations always issue their own stamps and coins.

liquidity — ability to be converted (changed) into cash

Investors are worried about the declining liquidity of their investment holding.

ounce — measure of weight used in English-speaking countries, equivalent to approximately 28 grams

bull — an investor who counts on prices rising when he or she buys stocks.

bear — an investor who counts on prices falling when he or she-buys stocks

1.Select the answer that correctly completes, each sentence

1. I'm going to buy these stocks because they’ve been showing a good ____________.

a. earnings b. growth rate c. commission

2. How much was his __________ on that painting at the auction?

a. fluctuation b. bid c. bargain

3. We can hardly pay for the necessities of life these days with this ____________ inflation.

a. declining b. bullish c. double-digit

4. Before acquiring more collectibles, Phil wants to check their_________________________ _______________.

a. bargain b. strategy c. liquidity

5. Even dealers in gold coins and jewelry are being badly affected by the ___________ market.

a. bearish b. recession c. slowdown

Dialogue 2

Phil O'Brien has decided to follow Carol Levine's advice. Hi has made an appointment to see Jeff Hunter, a broker, to discuss how to invest the money that was bequeathed to him by his aunt. He's in Mr. Hunter's office now.

Mr. H. Hello, Mr. O'Brien. It's good to meet you. Have a seat, please.

Mr. O'B. Thank you. As you may know I wanted some advice how to invest my aunt's money. I have almost no experience with investments and I feel I don’t have enough knowledge or information to make intelligent choices. One of your clients, a Ms. Carol Levine recommended that I see you.

Mr. H. Well, I can understand your concern. There are many investment possibilities, and conditions fluctuate so much nowadays.

Mr. O'B. The first area I thought about was stocks. My wife and I have a few shares in utility companies already, so stocks are not completely strange to me.

Mr. H. I should tell you that there are two ways to look at investing stocks. First, there are long-term investments. You can put your money into stable companies with a relatively secure yield. Or, you can concentrate on buying stocks that promise a good, rapid growth rate and resell them at a profit.

Mr. O'B. Well, I guess the second option means that I'd have to watch the stock market pretty carefully. I know I don't have time for it.

Mr. H. You're right. Your investment strategies would depend on whether you were facing a bullish or bearish market. You’d also have to consider factors in the economy such as a slowdown or a recession, double-digit inflation, interest rates, and other things that affect the companies you invest in.

Mr. O'B. I'd like to know what kind of stocks you've been recommending. Which sectors of the economy have been strong lately? What are the areas I ought to think about?

Mr. H. Well, we've had some good results with high yielding bank shares recently, and experts are predicting these will appreciate quickly in the near future. The data processing companies have been doing well and high technology stocks have also had high earnings.

Mr. O'B. I've read that the market has been pretty bearish lately. It must be a good time for bargain-hunters to invest.

Mr. H. True, but bargain hunters mustn't just buy stocks unless they make sure that the companies they invest in can make the growth through difficult times. Otherwise those investors may be faced with declining values.

Mr. O'B. What do you know about collectibles? I thought that they might offer some interesting possibilities for investment.

Mr. H. You've got to be careful with collectibles nowadays. Works of art, stamps and coins are less in demand now and are proving rather collectibles are finding their liquidity limited.

Mr. O'B. I can't believe it. It doesn't seem very long ago that dealers and auction-houses were making very big commissions. I remember some very high bids on paintings about a year ago.

Mr. H. Yes, but that has changed. Even gold jewelry, which was in great demand because of the steadily rising price of gold, has become less popular as the value of an ounce of gold has fallen over the last six months.

Mr. O'B. Well, you've given me some valuable information. Let me talk things over with my wife and I'll talk to you again next week.

Mr. H. Good. Let's see if we can make some money for you!

Date: 2014-12-28; view: 934