WHAT IS THE STOCK MARKET -place where stocks are bought are traded WHAT IS A STOCK TRADER? -someone who buys and sells stocks WHAT IS A STOCK? -unit of.

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Presentation transcript:

WHAT IS THE STOCK MARKET -place where stocks are bought are traded WHAT IS A STOCK TRADER? -someone who buys and sells stocks WHAT IS A STOCK? -unit of ownership in a company WHY DO COMPANIES SELL STOCK? -research better ways to make things -create new products -improve products they already have -hire more employees -enlarge their buildings IN OTHER WORDS….. -to make money

WHAT IS THE STOCK MARKET HOW DO YOU MAKE MONEY IN THE STOCK MARKET? 1. become a shareholder (buy a stock) 2. # of shares x price per share 3. the value of the stock increases HOW DO YOU LOSE MONEY IN THE STOCK MARKET? 1.Repeat steps #1 and #2 2.the value of the stock decreases

WHAT IS THE STOCK MARKET WAYS TO INVEST YOUR MONEY 1. CERTIFICATE OF DEPOSIT 2. MONEY MARKET ACCOUNTS 3. US BONDS 4. MUTUAL FUNDS 5. STOCKS 6. COLLECTIBLES

WHAT IS THE STOCK MARKET MUST ALWAYS THINK ABOUT THREE (3) FACTORS BEFORE YOU INVEST…. 1.SAFETY how risky is it 2. LIQUIDITY Easily turned in to cash Can you pull out of the investment easily 3. RETURN ON THE INVESTMENT -earning potential/how much money can you make

WHAT IS THE STOCK MARKET WAYS TO INVEST YOUR MONEY - STOCKS -THE DOW (DOW JONES INDUSTRIAL AVERAGE) -tracks 30 of most largest public companies on the market EXAMPLES Coca Cola (K0) Johnson & Johnson (JNJ) McDonald’s (MCD) Microsoft (MSFT) American Express (AXP) General Motors (GM) Wal-Mart Stores (WMT) Disney (DIS)

WHAT IS THE STOCK MARKET WAYS TO INVEST YOUR MONEY S TOCKS SAFETY -you are on your own -can either rise or fall LIQUIDITY -can sell it at any time -sold at what it is worth for the moment RETURN (DIVIDENDS) -payment made to stockholder to share profits SPLITTING -WHAT HAPPENS WHEN SHARES COST TO MUCH? -stock price reduces -increase in amount of shares each stockholder owns

WHAT IS THE STOCK MARKET WAYS TO INVEST YOUR MONEY S TOCKS WORKSHEET AND VIDEO

WHAT IS THE STOCK MARKET WAYS TO INVEST YOUR MONEY S TOCKS 52-WEEK HI/LOW -for most recent 52-week period -indicator of how the stock is doing (problems/bargain) SYMBOLS -language of investing VOLUME -how many shares traded that day P/E RATIO -price per earnings -determines if expensive or good value -how much profit you can make for each share

WHAT IS THE STOCK MARKET WAYS TO INVEST YOUR MONEY CERTIFICATE OF DEPOSIT (CD) -called a “CD” because the bank gives you a CERTIFICATE telling you: 1.The amount you deposited 2.The interest rate being paid 3.How long the money must be in your account -money is deposited in a bank (FDIC) -cannot take it out when you want it—must wait -the longer you wait, the longer you earn money

WHAT IS THE STOCK MARKET WAYS TO INVEST YOUR MONEY COLLECTIBLES -the items you buy and hope they will be worth something someday 1.Baseball cards 2.Art 3.Wine 4.Furniture -no guarantee people will buy it -no guarantee it will increase in value -may not be able to get money back if you want it -long-term investment

WHAT IS THE STOCK MARKET WAYS TO INVEST YOUR MONEY MUTUAL FUNDS -combination of the money of many investors to buy a lot of investments -chosen by a professional—they know what they are doing -avoids risk of investing in a single stock -can easily buy or sell shares -no guarantee -must pay an extra fee

WHAT IS THE STOCK MARKET WAYS TO INVEST YOUR MONEY U.S BONDS -lending money to the federal government -used during World War II to raise money for the war -backed by the federal government -money tied up for years -long range investing -low-risk; interest rates are lower