1. Stock Market Basics

2. What are Stocks? Stock is ownership in a publicly traded company.
Stock is a claim on the company’s assets and earnings.
The more stock you have, the greater your claim as an owner.

3. Why does a company decide to sell stock?
When a company decides to raise money, it can borrow the money or it can sell stock.
Each choice has pros and cons.
If owners want to maintain control of the company and restrict ownership, borrowing funds may be the best choice.
On the other hand, selling stock will dilute the ownership, but there are no repayments to drain future cash flow.

4. Types of Stock Common Stock – most common form of stock.
One vote per share
Dividends are not guaranteed
prices fluctuate a lot over time; its owner also shares in the loss or profit
Preferred Stock
Guaranteed dividend payments
They get paid before common stock owners do
Usually does not include voting
The price of preferred stock stays relatively the same over the time

5. Invest: When someone becomes an investor in a company they essentially become part owner with the expectation of making money
Volatility: Indicates how much and how quickly the value of an investment, market, or market sector changes
Company: A business or association usually formed to manufacture or supply products or services for profit
Corporation: A company legally separate from stockholders who own it and the managers who run it
P/E Ratio: A company’s closing price divided by its latest annual earnings per share

6. Diversification
It is difficult to predict how any given stock will perform
If you diversify you take on less risk
Portfolio: A collection of investments owned by one individual or organization
Risk: The chance of losing all or part of the value of an investment
“Don’t put all your eggs in one basket”

7. Ticker Symbols
All securities traded on the stock exchange have a ticker symbol
Microsoft (MSFT)
Southwest Airlines (LUV)
Ford Motor Company (F)
Google (GOOG)
Disney (DIS)
Apple (AAPL)

8. Initial Public Offering (IPO)
The first time a stock is sold to the public
Sold in the Primary Market

9. Twitter IPO: $41.65 on November 8th, 2013
January 3rd, 2017: $69 (highest point)
March 13th, 2017 $15.31

10. You never know…
Apple
Before the iPod: $6.56
Currently: $139.99

11. The Markets Primary Markets – where stocks are created
Secondary Markets – investors trade previously issued stocks
The Stock Market
Companies are not involved in the buying and selling of their stock.

12. The Exchanges Where Stocks are Bought and Sold
New York Stock Exchange (NYSE)
American Stock Exchange (AMEX)
NASDAQ

13. The Indices (index)
A collection of stocks—representative of the stock market
Dow Jones – 30 most significant stocks in the stock market
S&P 500 – 500 largest companies on the US stock market
NASDAQ Composite – all stocks on the NASDAQ

14. How Do You Make Money in the Market?
Stock Price Goes Up and You Sell
Buy low, sell high
Dividends
Not all companies pay dividends

15. Dividends

16. What Causes Stock Prices to Change?
Supply and Demand
Earnings and Expectations
Sentiments and Attitudes
Economic Indicators
Follow the Leader (volume)
Anything

17. Why Invest in Stocks?
The return on investments in the market are 3-4 times the annual return of inflation, savings and treasury bonds
You can make good money in the market
You can lose money too……

18. How Should I Invest? What are your financial goals?
What is your risk tolerance?
Return rises with risk
Do you want to actively manage your portfolio?
Diversify
Don’t put all your eggs in one basket!

19. Where do I Start? Learn the Basics Setup a brokerage account
Full-service vs. discount?
The Internet provides a variety of discount brokerage firms (do it yourself)
Fees, commission, minimum balance
Keep it simple as you learn
Learn about other investment vehicles

20. Reading a Stock Table
Ticker Symbol – the alphabetic name that identifies the stock.
Price – current stock price
Open – current day’s opening price
Close – the last trading price from the previous day
Net Change – the net change from the previous day
Day’s Range – the current day’s price range
52-Week Hi and Low – the highest and lowest prices at which a stock has traded over the past year
Trading Volume – the total number of shares traded for the day
Market Capitalization – the market value of the company
Dividend Per Share – annual dividend payment per share.
Price/Earnings Ratio – the current stock price divided by earnings per share for the last four quarters
Click to Yahoo Finance

21. Best ways to make money on the stock market?
Study and Research
Every publically traded company releases an annual report
It provides insight on what companies does, their financial performance, and its plan for the future
Do they plan on expanding? Did they report a loss and need to downsize?
Where to find reports: or the companies website

22. Bulls and Bears
Bull Market – the economy is great and stock prices are rising
Bear Market –the economy is bad and a recession is looming

23. Beyond the Basics
Bonds – a debt investment in which an investor loans money to an entity (corporate or governmental) that borrows the funds for a defined period of time at a fixed interest rate.
Buying on Margin - borrowed money that is used to purchase securities.
Selling Short - a trade in which the investor borrows a security and sells it to another investor in market.
Dollar Cost Average - buying a fixed dollar amount of a particular investment on a regular schedule

24. Etrade, Scott trade, there are a lot
Yahoo finance