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Presentation on theme: "Video Clip #1 Video Clip #2."— Presentation transcript:

1 Video Clip #1 Video Clip #2

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3 Why do you think that the price of American Outdoor Brands’ stock dropped after news of Dick’s Sporting Goods announced their decision and President Trump announced his proposals? Explain in 4 to 6 lines

4 Lesson 3.4 Choosing Stocks
Essential Questions: How does positive news and negative news impact the price of stocks?

5 Investors can profit from stock ownership through capital gains and dividends.
Capital Gain - profit made when an investor “buys low and sells high”. A capital loss is incurred when the stock is sold for less than it was purchased. Dividend - a distribution of a portion of a company's earnings, decided by the board of directors, to its shareholders. The dividend is usually expressed in terms of the dollar amount per share.

6 The stock market can be very volatile.

7 The stock market can be very volatile.
Volatility – changing rapidly from one condition to another

8 Stock prices often change due to speculation.

9 Stock prices often change due to speculation.
Speculation – to buy or sell when there is a large risk, with the hope of making a profit from future price changes

10 Impact of Positive News Impact of Negative News
D2 D1 D1 D2 V1 V2 V1 V2

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13 What is a “Day Trader”?

14 1. 2. In one complete sentence, what point is each cartoon attempting to make about online trading/day trading? 4. 3.

15 1. 2. 4. 3.

16 Summarizer: Word Splash Use each of the words below in sentence and paragraph form. Underline each word as you use it. Begin your summarizer with the following statement. Capital Gain Speculation Volatile Dividend Supply Demand

17 Some people buy stocks because of the regular dividends that some corporations pay to shareholders. Others hope to “buy low and sell high”, earning a capital gain. However, buying stocks can be risky because stock prices can be very volatile. Stock prices are determined by speculation. Good news about a company leads to an increase in demand as investors attempt to buy shares. However, at the same time there is a decrease in supply, as those who already own the stock become less willing to sell. This increase in demand and decrease in supply leads to a higher price. Negative news has the opposite effect, causing an increase in supply but less demand. Negative news, therefore, leads to lower stock prices.


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