Westminster SIFE Investment game Stock Market Presentation
Introduction Wouldn’t you love to be a business owner without ever having to show up at work? Retire early? Spend the rest of your life traveling? Playing golf? Or doing other things you enjoy? Do you know what we are talking about? INVESTING IN STOCKS!!!
What is a stock? A stock is a share in the ownership of a company. Represents a claim on the company’s assets and earnings. Stocks = Shares and Equity More Stocks = More Ownership
Owning Stock Owning Stock means you are entitled to your share of the company’s net income as well as voting rights. Stock Certificate – fancy piece of paper representing your share in that company. Allows you to take part in the election of the board of directors. Stock holders are the TRUE owners of a corporation and control the operations of that company.
Corporate Ladder STOCK HOLDERS!!! Board of Directors CEO CFO, President, Vice President Managers Employees
How Stock is Traded Most stocks are traded on exchanges Exchanges are places where buyers and sellers meet and decide on a price. Some are physical, while others are all electronically oriented, or virtual. Stock markets facilitate the exchange of securities between buyers and sellers. Markets make trading easier and reduce the risk of trading.
How Stock is Traded cont. The most prestigious exchange in the world is the New York Stock Exchange (NYSE). It was founded over 200 years ago in When a buyer/seller wishes to trade stock they contact their brokerage firm and a broker places a sell or buy order. Other investors like investing online using company’s such as Scott Trade, Share Builder, E Trade, and others. REMEMBER: Market Is Open From 9:30am until 4pm.
What Causes the Prices of Stocks to Change? Stock prices change daily due to: Market forces Supply and Demand Speculation of Professionals Interest Rates Company Earnings Corporate News Feeds It is important to stay informed and current in the news to be a profitable investor. Sources such as The New York Times, USA Today, CNBN, Mad Money, The Wall Street Journal, and your local paper can supply you with vital information that you can use to make decisions in managing your portfolio.
Super 7 System The super 7 system is a 7 step guide to investing followed by professional brokers all across the United States (except Bernie Madoff of course) 1. Ability 2. Goals 3. Plan 4. Evaluate 5. Select 6. Diversify 7. Manage
Categories of Stocks Blue Chip Stocks- well-established companies that have stable earnings and a good track record for paying dividends. These stocks are safe and stable. Penny Stocks- low priced, usually newer companies with no track record. Very risky. However, high risk means high reward. Income Stocks- higher dividend in relation to their market price. Used by investors to supplement their income. Growth Stocks- appreciate in value and yield a high return, profits are reinvested to expand the business. Due to the reinvestment the price of the stock grows over time. Value Stocks- securities considered by investors to be underpriced. Belief that the price will increase over time.