Ms. Palmer Pollard HS THE STOCK MARKET. Definitions  Stock: A share (or a piece) of a public company.  Stock Market: Where the actual buying and selling.

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Presentation transcript:

Ms. Palmer Pollard HS THE STOCK MARKET

Definitions  Stock: A share (or a piece) of a public company.  Stock Market: Where the actual buying and selling of stock takes place. The most famous stock market in the USA is the NY Stock Exchange. (It handles over 2 billion shares of stock per day!) The NYSE STOCKS

 Increase capital (money) For growth or to pay for unplanned expenses.  Owner might want to decrease ties to the company. This leads to a decrease in liability. He/she can spread ownership out and get money to spend.  There are also positive tax implications. WHY COMPANIES OFFER (SELL) STOCK?

 After Ray Kroc bought McDonalds, he needed capital (money) to open new restaurants.  In 1965 Kroc sold 300,000 shares of McDonald per share, that giving him $6.75 million in capital.  One share of McDonalds stock purchased in 1965 for $22.50 would be worth over $22, today! MCDONALDS AS AN EXAMPLE

 A market index measures changes in the value of a group of stocks from a specific starting point. (For example at 9:00 am EST on a trading day).  DJIA: Tracks 30 large US Corporations  S & P 500: Tracks 500 large US firms  Nasdaq: Tracks high-tech Stocks  We will be using the DJIA (aka the DOW) for our stock market Challenge. ECONOMIC INDEX

Bull Market: indicates an upward trend (stock values increasing) BULL VS BEAR MARKET Bear Market: Indicates a downward Trend (stock values Decreasing)

 Brokerage: a company that buys and sells stocks and bonds for investors  Stockbroker: help investors make and carry out decisions  Diversification: investing in a wide variety of financial assets. The way you diversify depends on your age and risk tolerance. A FEW MORE TERMS