introduction to stocks basics of investing i k. robinson
TRANSCRIPT
Introduction to StocksBasics of Investing I
K. Robinson
What is a stock?
Common stock
Gives you a “share” of ownership of a publicly traded company
Stock ownership
– Voting rights
– Claim to assets (behind debt holders) and earnings
What is a stock? Ticker symbols
– Set of letters that represent a security traded on an exchange
– Ex. MSFT, GS, AAPL, MA, BUD, LUV Stock quotes
– List of prices for a stock at a particular point during the trading day
Stock tickers– What do those green and red numbers
mean?
More Stock Quotes
Stocks vs. Bonds
Stocks are equity– Generally considered riskier– Quite possible to lose a significant
portion, if not all, of your money– Potential for high returns
Bonds are debt– Lower and usually fixed return– Higher claim than stockholders
What does this mean?
What Can Cause Stock Prices to Change?
EASY! Supply and Demand!But…what affects supply / demand of a
stock?
What Can Cause Stock Prices to Change?
Earnings & growth expectations
Positive / negative news
Economy sentiment
Investor sentiments & attitudes
How Stocks Are Traded
Major exchanges – Lists stocks (and other securities),
sets policies for how stocks are traded
New York Stock Exchange (NYSE) American Stock Exchange (AMEX) National Association of Securities
Dealers Automated Quotation
Only “publicly traded companies” are listed
Markets Indices S&P 500
– 500 stocks chosen by Standard & Poor to represent US stock market
NASDAQ Composite--With approximately 3,700 companies and corporations, it has more trading volume than any other stock exchange in the world, many of which are technology and electronics
Dow Jones Industrial Average– 30 most significant stocks traded
Stocks Markets & Animals
Bull Market– When everything in the market is going
great and stocks are generally heading upwards
Bear Market– When everything is NOT GOOD and
stocks are generally headed downward
NOTE: Nothing lasts forever! Good times and bad times will end at some point
http://www.investopedia.com/university/stocks/stocks7.asp
Brokerages Need a medium to
trade through – this is where brokerages come in
Criteria– Full service vs. discount– Fees (commission)– Services / tools– Minimum balance
Opening an Account Not a hard process- most of it just
some paperwork and mail– Sign-up online and download forms– Mail checks, forms, and copy of ID– Accounts created within a couple of days
What you will need: a computer, starting capital, and investing know-how
Principle of trading stock
Buy your stocks when the prices are low.
Sell your stocks when the prices are high.