Stocks and Bonds Invest: To use money to earn interest or income in the hopes of making a profit. What are some examples of investments? ___________________________________.

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Presentation transcript:

Stocks and Bonds Invest: To use money to earn interest or income in the hopes of making a profit. What are some examples of investments? ___________________________________ ___________________________________ ___________________________________ Why do people want to invest money? ___________________________________

What are stocks? Stocks are shares in a corporation. –A business sells stocks to people to get money. In return, the people own part of that business. It is good for the company and the stock holders.

Stock Dividends Preferred Stock :Stock that offers the stockholder stated dividends / no voting rights –Example – General Motors Common Stock : Stock that gives the stockholder voting rights. May or may not get dividend –Example – Smaller businesses

Buying and Selling Stock People can buy stock for a certain price and then sell it at a higher price. What are these stocks? ___________________________________ ___________________________________ Where can you buy them? ___________________________________ ___________________________________

Where to buy and sell stocks Stockbroker: A person who is licensed to buy and sell stocks for other people. –They handle the sales “middle man” Stock Market: A place where stocks and bonds are traded. –In the US: New York City

Gains and Losses Capital Gain: Profit made on selling stocks –Example: If you buy 10 shares of K-Mart stock at $10 a share. You sell in 3 years for $20 a share. What is your capital gain? __________ Capital Loss: Money lost from investment –Example: If you buy 10 shares of K-Mart stock at $10 a share. You sell in 3 years for $5 a share. What is your capital loss? ___________

Bonds Basically an IOU The person who buys the bond is lending money to the government or corporation that sells the bond. The person earns interest.

Securities and Exchange Commission Government agency that regulates the trading of stocks and bonds. Tries to prevent people with inside information from making money unfairly.

Reading the Stock Report Name of stock (pf means preferred) 52 week high/low: Shows the high and low prices for the last 52 weeks Div: Annual dividend paid per share Sales Hds: Sales in hundreds (shares traded that day) Last: Price when market closed Net Chg: Increase or decrease in price from previous day.

Classwork 1. Page Personal Economics 3. Look at a newspaper stock report and complete the worksheet.