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Investing in your future

Investing in your future. What is INVESTORS OF TOMORROW?. Investors of Tomorrow strives for excellence in fulfilling the mandate of providing financial literacy and investor education to students of all ages locally, regionally, and nationally.

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Investing in your future

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  1. Investing in your future

  2. What is INVESTORS OF TOMORROW? • Investors of Tomorrow strives for excellence in fulfilling the mandate of providing financial literacy and investor education to students of all ages locally, regionally, and nationally. • It is our goal to motivate and educate students to invest early, invest often, and invest right

  3. What is the stock market? • Stock market is a market for the trading of company stock and derivatives (generic term for aninvestment) of same; • both of these are securities (legal right given to a creditor by the borrower) • Is listed on a stock exchange as well as those only traded privately.

  4. What is a stock exchange? • The stock exchange differs from the stock market in that it is an entity (a corporation or mutual organization) in business of bringing buyers and sellers of stock together. • For example, stock markets in the United States include • the NYSE (New York Stock Exchange), • the NASDAQ (National Association of Securities Dealers Automated Quotations) • Although many other stock exchanges exist, participants in the InvestYoung competition can only trade on Canadian and American stock exchanges

  5. Concept of Trading • Most stocks are traded on exchanges, which are places where buyers and sellers meet and decide on a price. • Some exchanges are physical locations where transactions are carried out on a trading floor, by a method known as open outcry. • The other type of exchange is a virtual kind, composed of a network of computers where trades are made electronically via traders at computer terminals. • The New York Stock Exchange is a physical exchange, where much of the trading is done face-to-face on a trading floor whereas the NASDAQ is a virtual exchange, where all of the trading is done by computers.

  6. Purpose and Function of the Stock Market • In general, a company will offer sales of their shares to the public in order to raise capital, which in turn will be channelled into various investment projects.

  7. Leveraged Strategies • Short Selling: • Seller borrows stock and sells on market, hoping for price to fall. Essentially reverse of normal purchasing, in that money is gained if stock drops. Exiting a short position is called “covering a short position”.

  8. Leveraged Strategies • Margin Buying: • Buyer can borrow up to 50% of their portfolio value to invest in stocks. • For example, if you have $100,000, then you can borrow $50,000.

  9. Prizes • In terms of prizes, the top 10 competitors of the overall competition are invited to an annual Investors of Tomorrow Awards ceremony. • I am looking at having prizes for those at our school too.

  10. Basic Rules #1 • The stock markets are open from 9am until 4pm from Monday to Friday • Markets are not open during the weekends and statutory holidays • •Orders for the sale or purchase of shares can be made at anytime on any day, but the order will only be processed when the markets are open • Trades can be made anytime from 10 am until 4 pm • Activities in all accounts are continuously updated – updates on transactions, portfolios and rankings have a delay of at least 15 minutes

  11. Basic Rules #2 • The trading log shows two types of transactions – (1) pending transactions, and (2) completed transactions) • Pending transactions are transactions that have been ordered (either purchase or sale) but have not yet gone through (possibly because it was ordered outside of the stock market hours, or it has not met the maximum/minimum price limit set) • Completed transactions are transactions that have gone through. The particular stock has now been purchased and is part of your portfolio holdings, or has been sold and is now gone from your portfolio holdings

  12. Basic Rules #3 • Users can only trade stocks, options, and commodities on the TSX (Toronto Stock Exchange) and NYSE (New York Stock Exchange) • There is commission charged on every transaction starting from $25.00 – commission could be higher depending on the number and the price of shares purchased • There are daily volume limitations that apply to the transactions – The total number of shares that can be traded daily for any stock or mutual fund is limited to 20% of the actual number of shares for that stock or mutual fund that were traded that day and also by the amount of cash remaining in the user’s account

  13. Basic Rules #4 • When confirming a purchase or a sale order, there is an option to set a maximum limit price (for purchases) and a minimum limit price (for sales) – setting limit prices are optional; you don’t have to set one • With a maximum limit price, the particular stock will not be purchased if it goes over the price you set. • With a minimum limit price, the particular stock will not be sold if it drops below the price you set.

  14. Important Rules • There is a trade limit - only 10% of the account can be put into one security (i.e. if you have $1,000,000 in your account, then the student can buy a maximum of $100,000 worth of Google shares.) • Students may not perform trades with securities of that have a value of less than $3 CAD.

  15. Funding • All Investors of Tomorrow branches are required to tender a branch fee of to the Investors of Tomorrow organization. • This fee allows all members of the paid Investors of Tomorrow branch to participate in Investors of Tomorrow activities (e.g. online competition, award ceremony, and more) and make use of Investors of Tomorrow’s offered educational resources. • Last year it was around $10 per person • I need YOUR ideas for what we could do

  16. Resources • Stock Exchanges • American Stock Exchange • NASDAQ Stock Market • New York Stock Exchange • Toronto Stock Exchange • Indexes • The Dow Jones Industrial Average • Russell • Standard and Poor's • Quotes and Research • CNN Markets and Stocks • Yahoo! Finance • MSN MoneyCentral • Lycos Finance • Forbes Stocks • Information for Investors More tips on trading are available on our website (www.investyoung.org) under the resources section. There is also very helpful information on http://investopedia.com

  17. Resources • Learning Tools • How Stuff Works: Stocks and Stock Market • Independent Help for Successful Investing • About Stocks and Stock Investment • Introduction to the Stock Market • Investor Words • Business News • USA Today Money • CBS Market Watch • Canada: Stocks, Investing, and Financial News • Bloomberg: Financial Markets Commodities News

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