1 / 12

Introduction to the Stock Market

Introduction to the Stock Market. The Basics of Stock Investing. You must earn more than the rate of inflation to raise wealth Stocks & Bonds are common investment options Bonds: a loan to a Gov’t or business where you earn interest Stocks: You become part owner in a company.

atalo
Download Presentation

Introduction to the Stock Market

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Introduction to the Stock Market The Basics of Stock Investing

  2. You must earn more than the rate of inflation to raise wealth Stocks & Bonds are common investment options Bonds: a loan to a Gov’t or business where you earn interest Stocks: You become part owner in a company Why Invest Money? Your Money U.S. Gov’t 5-Year Bond $1,000 $30 per year You are paid 3% interest

  3. Average return per year 1926 - 2000 • The longer the holding period----the more risk you should take! • Stocks= long terminvestment (5-years or longer) • Bonds = medium term investment ( 1-3 years) • Bank CD’s = short term investment (30 days to 2 years)

  4. Why Companies Issue Stock • To raise money to expand/ run business • Investment Banks help companies issue stock • IPO = initial public offering • When a new company sells stock for the 1st time

  5. Stock Market Introduction Worksheet

  6. Industry Type Sectors of Stock Market • Technology • Transportation • Retail • Financials • Energy • Health Care • Defense • New Industries (looking to the future…)

  7. 2 Goals of a Company 1) Maximize Profits(each year) 2) Grow Profits(over time) Companies that grow PROFITS the fastest have the best stockperformance

  8. Key Stock Indices WHY INDICES: There are over 5,000 stocks! Indices give the average Performance of the overall market • S&P 500 Index • Largest 500 companies by $ value • Dow Jones • 30 very large American companies • Nasdaq • primarily technology stocks

  9. Stocks in Dow Jones Index

  10. BULL or BEAR MARKET? . .

  11. Recent Stock Market History • Stock market hit a high in March of 2000 • 3 years of negative returns followed [2000,2001,2002] • 2003 SP500 +26.0% • 2004 SP500 +9.0% • 2005SP500 +3.1% • 2006 SP500 +13.6% • 2007SP500 +3.5% • 2008 -40.0% • 2009 +25% • 2010 +13.0% • 2011 -6.0%

  12. Top 10 things to know about Stocks • Reading:

More Related