Introduction to the Markets By Mr. Brown. Content What is a market? What is bullish versus bearish? What are stocks and mutual funds? Why does the market.

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Presentation transcript:

Introduction to the Markets By Mr. Brown

Content What is a market? What is bullish versus bearish? What are stocks and mutual funds? Why does the market fluctuate? How does this affect you and why you care?

Markets A market:A market is a place (physical or electronic) that allows buyers and sellers of a specific good or service to interact in order to facilitate an exchange.buyerssellers

Markets (cont.) Major U.S. Markets: NYSE (New York Stock Exchange) NASDAQ (National Association of Securities Dealers Automated Quotations) Major Foreign Markets: London Stock Exchange (U.K.) Tokyo Stock Exchange (Japan) Hong Kong Exchange (China) Shanghai Exchange (China) Eurex Exchange (Germany)

Bull versus Bear Bull (expect growth, attacks up) The company develops a new product or service everyone wants (apple or twitter) Can be used to describe the market in general.

Bull versus Bear (cont.) Bear (expect decline, attacks down) A company fails to produce a product that they expected to be able to deliver or consumers dislike product/ service Can be used to describe the market in general.

Stocks (also known as Equities) Stock: a type of security that signifies ownership in a corporation and represents a claim on part of the corporation's assets and earnings (commonly electronic).corporation Dividend vs. Capital Gains Preferred vs. Common

Why are stocks issued? Companies begin as private companies with a few owners. When a company needs a large amount of money to expand their production or service they hire a investment banking/ brokerage firm to help them with an IPO (intial public offering). This is also called going public. ideo/play/public-company/

Mutual Funds Mutual funds: is an investment made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets.investingmoney market

Indices Index: an index is an imaginary portfolio of securities representing a particular market or a portion of it. ideo/play/standard-and-poors- 500-index/ Major Indices (US): S&P 500 Dow Jones Industrial Average Other Indices (Foreign) Nikkei (Japan) HangSeng (China) Dax (Germany)

Market Fluctuations Why does it go up? People like a stock and everyone wants to buy the stock. People expect a stock to be more valuable due to some news. Why does it go down? People don’t like a company. People expect that the company will be beat by their competitors.

Crashes Panic of 1901 Panic of 1907 Wall Street Crash of 1929 Kennedy slide of 1962 Black Monday (1987) Friday the 13 th Minicrash (1989) Dot Com Bubble (2000) Financial Crisis of Flash Crash

Why do you care? IRA, 401k, brokerage accounts, pensions all invest in stocks and mutual funds The average person will not make enough money at one time to sustain them for the remainder of their life and must have some form of savings. Investments on average return more value to the owner than typical savings accounts in a bank. Investment accounts can provide tax benefits compared to non-investment accounts.

References Investopedia Wikipedia Discount Brokerages: Charles Schwab, Fidelity, Etrade, TD ameritrade, etc. Full service Brokerages: Goldman Sachs, Barclays, UBS, Morgan Stanley, J.P. Morgan Chase