1.12.2.G 1 STOCKS Essential Questions 1. In what ways does the stock market impact the personal wealth of an individual and a business? 2. Why diversify within a portfolio? http://www.investopedia.com/video/pla y/pick-your-investing-style#axzz1cCDF WuQy ity, capital, stock ticker, stock symbol, bull & bear market, exchange, stock index, dividends, capital oss, stock split, classifications (growth, , blue chip, speculative, cyclical, counter al, commodity)
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1.12.2.G1 STOCKS Essential Questions 1.In what ways does the stock market impact the personal wealth of an individual and a business? 2.Why diversify within.
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1.12.2.G1
STOCKSEssential Questions
1. In what ways does the stock market impact the personal wealth of an individual and a business?
Business & Stock After IPOhttp://www.investopedia.com/video/play/Why-Do-Companies-Care-About-Their-Stock-Price#axzz1cCDFWuQy
1.12.2.G1
Stock s
NYSE: Oldest/largest by vol. traded & mkt. cap. (2,800 Companies)• Issued at least 1 million shares worth $100 million• Earned >$10 million in last 3 years
NASDAQ: Largest trading volume (over 2,900)- More volatile• Issued 1.25 million shares worth $70 million• Earned >$11 million in last 3 years
Stock ExchangesA place where securities are bought & sold by professional stockbrokers
Listing Requirements: Conditions imposed by a stock exchange upon companies that want to be listed on that exchange. (Min. # of shares, min. mkt. cap, & min. annual income
1.12.2.G1
Stocks
Capital Gain/Loss: Difference between the purchase price & selling price when an investor buys a security and sells it later.
Dividends: Portion of the profits paid to the shareholders of a company. Decided by board of directors & not required.
An imaginary portfolio of securities representing a particular market or a portion of it.• DJIA (The Dow Jones Industrial Average) – 30 Blue chip• S&P 500
Growth stocks: consistent record of relatively rapid growth and earnings in all economic conditions– New companies expending product lines– Examples include Coca-Cola and Wal-Mart
• Blue-chip stocks: long records of profit, dividend payments, and a good reputation for management– Less risky– Grow at a consistent rate– Examples are McDonalds, Wal-Mart and
1. Looking at a stock price alone doesn’t tell us much about a stock2. If the stock price is close to the 52 week high, you may want to hold off3. Companies typically choose to reinvest their earnings (growth), give it
to shareholders (income) or a combination of the two4. High dividend yield - over (4%) = income stock5. Yield refers to the return to investors