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Stock Market Pay attention, take notes and ask questions…how much can you make?
Industries Investment – Savings vehicle used for retirement. Examples – 401 k, 403 b, Roth IRA, Mutual Funds, Stocks (equities), Money Market • An industry is the type of business that the company operates…(ex. Construction, food services, energy, technology)
Top Down Approach – Find the best performing industries and find the best performing stocks in those industries. -Portfolio- a collection of stocks or investments that you have purchased. • Diversify your portfolio – Invest in stocks that are from different industries. • “don’t put all your eggs in one basket”
Industries…cont! NIKE – CLOTHING PEPSI – BEVERAGE HOME DEPOT – CONSUMERABLES GENERAL MOTORSAUTOMOBILES MICROSOFT – COMPUTER SOFTWARE APPLE- COMPUTER HARDWARE
EXAMPLE –e. g… • Share – A piece of a company Example: • You buy 100 shares of Nike Stock at 50. 00 per share! • Total invested=5000$ • You hold the stock for 2 years, and sell the 100 shares at 70. 00! • Total sale=7000$ • Investor makes 2000 dollars!
Ticker Symbol and Share Price! • • Nike – NKE Pepsi – PEP Home Depot – HD General Motors - GM Microsoft – MSFT Apple – APPL Why? To make it easier. Abbreviations are much easier to use. Example on the web! Share price can be very high or very low. You can buy as many shares as you like.
Economic News – Good vs. Bad! • If unemployment rate, inflation numbers, and consumer confidence and spending numbers are good = Usually means good news for the Stock Market as a whole. • If a single company like DELL reports high quarterly earnings = usually means the stock price will increase.
Practice: • Create the chart below and complete it: Stock Buy Price Shares Purchased Nike 40. 00 10 50. 00 Facebook 80. 00 20 77. 00 Amazon 200. 00 5 220. 00 Delta 25. 00 10 28. 00 --------------- Total TKR Symbol ----- Total Invested Sell Price Total Gain/loss
FEAR vs. GREED – BEAR Market • Consumer Confidence down • Terrorist Attack • Bad economic forecast • Results in people pulling their money = lower the stock price BULL Market -Consumer Confidence up! -Economic Forecast Good! -Strong Economic Numbers! -Results in people putting more money in = higher
TWO TYPES OF STOCK • GROWTH STOCKS – Cheaper share price – Smaller companies with lots of room to grow – RISKIER! • VALUE STOCKS – Big Companies – Less risky – Share price is more expensive – Less room to grow
Two Major U. S. Markets • New York Stock Exchange • (NYSE) • NASDAQ - National Association of Securities Dealers Automated Quotations • Brought about because the NYSE was getting too large • Mostly comprised of technology stocks ex. MSFT (4 symbols)
Two Major Indexes • DJIA – Dow Jones Industrial Average (comprises of 30 well diversified companies) • S&P 500 – Standard and Poor’s 500 (comprises of 500 well diversified companies)
There are other investments besides the Stocks… • Things that you should consider when you get older and you begin saving for retirement! – 401 k (403 b) – IRA – individual retirement account – Mutual Funds – Life insurance We are forced to pay into Social Security…but don’t rely on it…you have to prepare that it might not be available!
What Rules to Follow: • Diversify your Portfolio • Where can we research? www. morningstar. com • Find the best performing industries • Within those industries, find the best performing stocks • E. g…. Technology, MSFT!
Stock Market Project • 7 parts / sections of the • Pay attention…take assignment notes…and help each other out! • Each sections worth 25 points --- 175 + • We will be going to directions followed the lab/library to (25 pts) = 200 pts complete some of the possible! project in class! • Directions to follow throughout the project!
Vocabulary Terminologies… You need to define all of the following terms…IN YOUR OWN WORDS! Complete Sentences! • • • Stock Share NYSE Stock Split NASDAQ Diversify S&P 500 Ticker Symbol Bear Market 401 K • • • Bull Market Capital Gain DJIA I. P. O – “initial public offering” Mutual Fund Portfolio S. E. C – “securities exchange commission” Stock Broker Wall Street