1. Introduction to the Stock Market
The Basics of Stock Investing

2. Stocks vs. Bonds Stocks & Bonds are common investment options
Bonds: a loan to a Gov’t or business where you earn interest
Stocks: You become part owner in a company
Some stocks pay dividends
Your
Money
U.S. Gov’t
5-Year Bond
$1,000
You are paid 3% interest
$30 per year

3. Why Companies Issue Stock
To raise money to expand/ run business
Investment Banks help companies issue stock
IPO = initial public offering
When a new company sells stock for the 1st time

4. Recent IPO’s

5. 2 Goals of a Company 1) Maximize Profits (each year)
2) Grow Profits (over time)
Companies that grow
PROFITS
the fastest
have the best
stock performance

6. You can invest in indices
Key Stock Indices
S&P 500 Index
Largest 500 companies by $ value
Dow Jones
30 very large American companies
Nasdaq
primarily technology stocks
indices track
the performance
of a large # of stocks
You can invest in indices
through index funds

7. Sectors of Stock Market
Industry Type
Sectors of Stock Market
Technology
Transportation
Retail
Financials
Energy
Health Care
Defense
New Industries (looking to the future…)

8. Graphing Stocks before you buy

9. BULL or BEAR MARKET? . .