Stock Market Introduction to the Stock Market

What is a stock? Partial ownership in a business – Dividends = Profits paid out to stock holders four times a year or re-invested into the company Types of Stocks – Common Stocks – people owning stock can vote for the directors of the company Example: NW Natural Gas, GM – Preferred Stock – fixed dividends, no voting privileges Example: Nike, McDonalds Other words used for stocks – Equities – Securities – Shares

What is the difference between a mutual fund and a stock? Mutual fund – Investment through a broker into a fund that has multiple stocks in many companies – Benefits: Lower risk because you are diversifying your investment

Major Stock Markets New York Stock Exchange (NYSE) – Wall Street National Association of Securities Dealers Automated Quotations (NASDAQ) – Mostly technology stocks – Automated

How do I purchase stock? Brokerage House – Full Service Brokers Dean Witter, Merrill Lynch, Prudential Bach – Discount Brokers Charles Schwab, Ameritrade, eTrade

Reading Stock Pages

Major Stock Markets New York Stock Exchange (NYSE) – Wall Street

Major Stock Markets NASDAQ – National Association of Securities Dealers Automated Quotations – Mostly Technology Stocks

General Terms Earnings per share: Amt of profit each share is entitled Going Public: Company plans to sell stock Share: investor’s ownership of the profits, losses, and assets of a company Market Indices: tracks performance of specific group or market of stocks

Market Indices Dow Jones: index of 30 “Blue Chip” US stocks of industrial companies (financial, computer, retail companies) NYSE: New York Stock Exchange tracks the movements of all common stocks Nasdaq: Tracks performance of 100 of the largest most actively traded stocks

Dow Jones Coca Cola Home Depot AT&T American Express Bank of America Dupont GE

Nasdaq Stocks Amazon.com Apple Costco Comcast Google Dell