ALL ABOUT STOCKS Today’s Learning Targets: Students will be able to understand common terminology associated with the stock investments. Students will be able to use common strategies to select their own stock.

Review Which of the following is investing for current income? A.Retired person who needs to pay living expenses B. Business manager planning for retirement C. Student putting away money for college D. Family that wants to buy a vacation home The most liquid investment listed here is: A. Rare coins B. Real Estate C. A Savings Account D. A House

Review A person who desires high income from an investment would be most concerned with A. Safety B. Return C. Liquidity D. Risk What are the four factors to consider when selecting an investment? 1. Safety 2. Return 3. Liquidity 4. Taxes

What is Stock? What is the difference between Preferred Stock and Common Stock?

Stockholder Buyer of shares in a corporation Stock Certificate Printed form that shows ownership Dividends Payment of stock profits to stock holders

Buying Stock Using a stockbroker - licensed specialist Full Service Broker vs. Discount Broker Online investing- AMERITRADE Stock exchanges – business organization that accommodates buying & selling NYSE, AMEX, CHX – exchange floor NASDAQ – transactions made via computer or phone

Changing Stock Values Market Value: Market Value: price at which a share of stock can be bought and sold in the stock market. Current value of a share of stock What affects Market Value? Supply and demand Financial news and the economy Stock Index – another measurement of investment value

DOW JONES DOW JONES The last year

What makes the perfect stock? Wombat, Inc. Makes a Product That... Everyone needs No one has Is used daily Cannot be duplicated Will be needed in the future Costs little to produce and ship Doesn’t need to advertise Will enjoy a growth rate of 50% per year for the next ten years Never had a down year in its 100- year history

STRATEGIES FOR STOCK SELECTION Go with what you know Markets: Current & Future Economic Cycle Avoid Obvious Risks Front page companies & this year’s winners Current industry condition Changes in technology Specific stock situation Selecting Stock for the The Stock Market Game

RISK FACTORS Profitability: Is the company or investment making a profit? Product: Does the company have a successful product? Market Share: Does the company have a large share of the market? Competition: Are other companies creating similar or better products? Management: Does the company have strong leaders?

Stock Selection Economic factors Inflation Interest rates Consumer spending Employment

Four Step Process for Deciding Stock Purchases 1. 1.Observe and analyze economic and social trends Determine industries that will be affected Identify companies in those industries Decide whether to buy, sell, or hold the stock of those companies.

How do you want to invest? Online Sources: Online Sources:

Company Ticker Symbol Financial news and/ or results that may affect your decision. [Think Risk Factors] Subscribers are streaming more video per hour than they ever have before. Revenues are up for Netflix, while cash flow is still a struggle. Netflix is starting to produce its own shows – may eventually compete with traditional networks. SOURCE: Economic Factors that may affect your decision. Respond on how inflation, interest rates, consumer spending, & employment are doing right now. RESEARCH THIS! You can probably use the same information for all of your companies that you research. Draw the basic shape of the stock price over the past 5 years. Will you invest in them? YES! I think that they are rebounding after an unusual low. They are being creative & innovative in the types of services they are offering. I also think that this is the future of TV viewing. Thus, it would be a good investment now.

Company Ticker Symbol Financial news and/ or results that may affect your decision. [Think Risk Factors] Subscribers are streaming more video per hour than they ever have before. Revenues are up for Netflix, while cash flow is still a struggle. Netflix is starting to produce its own shows – may eventually compete with traditional networks. SOURCE: Economic Factors that may affect your decision. Respond on how inflation, interest rates, consumer spending, & employment are doing right now. RESEARCH THIS! You can probably use the same information for all of your companies that you research. Draw the basic shape of the stock price over the past 5 years. Will you invest in them? YES! I think that they are rebounding after an unusual low. They are being creative & innovative in the types of services they are offering. I also think that this is the future of TV viewing. Thus, it would be a good investment now.