1. Stock Markets Being an educated investor will enable you to become financially sound.

2. Stock Markets in America New York Stock Exchange (NYSE)  Oldest (1792) & largest  Trading Floor Trading Floor NASDAQ (National Association of Securities Dealers Automated Quotations)  Electronic stock market The American Stock Exchange (Amex)  Now NYSE Amex Equities  Acquired by NYSE Euronext in 2009

3. Other Markets CME (Chicago Mercantile Exchange)  Commodity exchange  Trades futures & options on commodities Commodities  Good that is the same regardless who produces it Pork bellies, corn, wheat

4. Blue Chip Stock Common stock of large, stable corporations Solid records of dividend payment Benefits:  Buy and hold  Brand companies  Good for children’s portfolios

5. Dow Jones Industrial Average One of main index  Used as indicator for entire market How many companies in Dow Jones?  30 Blue Chip Stocks Which 30?  30 Blue Chip Stocks  Alter depending on economy

6. S&P 500 Standard & Poor’s index 500 large-cap common stocks  Started 1957  Committee choices companies based on: Market Size Liquidity Industry Grouping More

7. Classification of Stocks Growth Stocks  Show greater than average gains for the industry Income Stocks  Earnings or dividends are high; provide steady income

8. Bull Market Lengthy period when stock prices rise 1983-1997: Longest bull market

9. Bear Market Lengthy period when stock prices fall Decline of at least 15% in stock averages Why are they known as Bull and Bear?

10. Types of Risk Volatile or Speculative  Higher risk, but could produce a higher return Collectibles, aggressive stocks, property Conservative  Lower in risk, but will give you a lower overall return CD’s, Savings Accounts, Money Markets, Government Securities (Bonds, T-Bills)

11. GONE THROUGH CHAPTERS 1 & 2, WILL WORK THROUGH 3 THIS WEEK AND NEXT. RISK CHART ON PAGE 33

12. Terms Prospectus  Legal document providing information about a stock or mutual fund Common vs Preferred Stockholders  Common: voting rights  Preferred: get paid dividends first

13. What you need to know about stocks. Through handout out looking at one  http://finance.yahoo.com/

14. General Rule of Thumb Shareholders should BUY LOW, SELL HIGH BUT, when can you make money when the market is heading south?  Dollar Cost Averaging  Day Trade Day Trade  SHORT SELL – very risky Borrow shares from broker Sell them high

15. Look up Stock Stock Suggestion Sheet Make sure to look up a COMPETITOR