yun slideshow 08282014

9
The Stock Market, a Big Green Money Making Machine

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Page 1: Yun slideshow 08282014

The Stock Market, a Big Green Money Making

Machine

Page 2: Yun slideshow 08282014

What is the Stock Market?A stock market is a place where shares of stocks are sold and

boughtThe main stock markets are NYSE (New York Stock

Exchange), AMEX (American Stock Exchange), and NASDAQ (National Association of Security Dealers Automated Quotations)

You can’t actually go to the stock market; you have to contact a stockbrokerA stockbroker is

someone who buys or sells stocks for you for a fee (commission). Internet based brokers charge a small commission, so anyone can afford to invest!

Page 3: Yun slideshow 08282014

Why Invest In the Stock Market?The stock market is a great way - maybe even the best way

- to grow your moneyMost companies increase their value of the stock at

higher rate than the bank interest rate Some companies pay a dividend, which is like interest

Even though the stock market is riskier, if you invest correctly, it gets you much more money than keeping you money in the bank Higher risk means higher reward The average stock value grows faster than does the

bank’s interest

Page 4: Yun slideshow 08282014

Grandkids Age 60

Stocks: $441,056Bank: $40,226

$0.00

$200,000.00

$400,000.00

$600,000.00

$800,000.00

$1,000,000.00

$1,200,000.00

Your money grows faster in the Stock Market!

If you start with: $500

And you add monthly:

$50

Number of years 65

Stock Market

Bank

Interest rate 8% 1%

When you’re 75 $1,021,767 $51,225

Graduates High SchoolAge 18

Stocks: $8,255Bank: $5,865

Gets a jobAge 23

Stocks: $14,174Bank: $8,551

Starts a familyAge 30

Stocks: $38,728Bank: $15,380

Retirement Age 65

Stocks: $634,661Bank: $44,837

Stocks

Bank

Age 75!

Page 5: Yun slideshow 08282014

What is stock?Stock is a part of the company that people can buy to own

The stock is divided into “shares” that you can buyThe money from a company’s stock funds their operations

After paying expenses, the money left over is their profitSome companies will share their profit with their stock

holdersAs the company’s profit grows, the value of the stock growsValue of a share If you invested $100 in each

company

2004 2014 2004 2014

Apple (AAPL) $28.06 $592.00 $100.00 $2109.76

Nike (NKE) $17.79 $72.99 $100.00 $410.29

Google (GOOG) $54.10 $527.93 $100.00 $975.84

The Gap (GPS) $24.15 $39.28 $100.00 $162.65

Disney (DIS) $23.47 $80.31 $100.00 $342.18

$500.00 $4000.72

Page 6: Yun slideshow 08282014

How to pick the right stockThink about popular trends and companies involved in

these trendsResearch the company, for example look up their revenue

and profitThink about what special events are coming up and which

companies might be affectedFor example, if Easter or Halloween is coming up, you

might want to buy stock in Hershey. Good Signs Bad signs

Promising products Products that are fads

Little debt Increasing debt

Increasing revenue & profit

Decreasing revenue & profit

Little competition Heavy competition

Popular trend, high demand

Staying power

Page 7: Yun slideshow 08282014

Meet: Warren BuffettWarren Buffett is the world’s greatest investorHe started investing at the age of 11.

In 1956 he started to invest his friends’ and family’s money

In 1965, he bought Berkshire Hathaway and over the next 50 years he continued to buy companies, such as See’s Candies and Geico Insurance.

His current net worth is 58 ½ billion dollarsHe made this money from mostly investing in stocks like

Coca-ColaThe way he invests is a method that everybody can use.

Patience Extensively researching the companyNever overpaying for the stock

Page 8: Yun slideshow 08282014

How to build your stock portfolioA portfolio is the collection of stocks that you ownTo build your portfolio, the best way is to:

Identify good companiesBuy at a low priceHold on to your stocks for a long timeBuy lots of stocks

It is safer to invest $100 in 10 companies than it is to invest in $1,000 in 1 company

Don’t panic if your stock drops! The best thing to do is to hold. Sometimes, it is a good idea to even buy more shares!

Warren Buffett once said, “Be fearful when others are greedy and be greedy when others are fearful!”

Page 9: Yun slideshow 08282014

Resources McGowan, Eileen & Dumas, Nancy. Stock Market Smart. Brookfield,

Connecticut: Millbrook Press, 2002. Orr, Tamra. A Kid’s Guide to Stock Market Investing. Newark, Delaware:

Mitchell Lane Publishers, 2008. Thorndike, William. The Outsiders. Boston, Massachusetts: Harvard

Business School Publishing, 2012. Davidson, Avelyn. The Bull And The Bear. New York, New York: Children’s

Press, 2008.

Great websites for beginning investors The Motley Fool (www.fool.com) Investopedia (http://www.investopedia.com) The Secret Millionaires Club (www.smckids.com) The Stock Market Game (www. stockmarketgame.org)