DID YOU KNOW …….?

1. DID YOU KNOW …….?

2. If you had invested $10,000 in Dunkin Donuts in 1982, you would have made $47,000 over the next 4 years • A $10,000 investment in the Gap (in ’76 it was $18 a share) would have resulted in a $250,000 gain. • If you had invested the price of a Subaru car into Subaru stock in 1977 and sold it it 1986 you would have a made a million dollars. • That’s right. A million dollars. • Coleco, maker of cabbage patch dolls, stock went from $65 a share in 1983 to…. • $1.75 just before filing before bankruptcy in 1988 • There’s no such thing as a sure thing • $1,000 invested in Wal-Mart stock in Jan of 1972 would now be worth….. • $1,165,000!!!!!!!!!!!!!!!!!!! • $1,000 invested in Microsoft in 1986 would now be worth about … • $289,000 ($.10 in ’86 $29.12 in ’06) • Instead of spending $30 a month on lotto tickets put that same $30 a month in a good mutual fund. At retirement you will have well over $1,000,000

3. Margin –is buying stock on credit. Usually an investor will borrow from a broker. • Diversification: Spreads the risk • Stock Exchanges: where stock is bought and sold (market for buying and selling stock)

4. Alcoa - AA American Express - AXP AT&T - T Boeing - BA Caterpillar - CAT Coca-Cola - KO Citigroup - C Disney - DIS DuPont - DD Eastman Kodak - EK Exxon Mobil - XOM General Electric - GE General Motors - GM Hewlett-Packard - HWP Home Depot - HD Honeywell - HON IBM - IBM Intel - INTC International Paper - IP Johnson & Johnson - JNJ McDonald's - MCD Merck - MRK Microsoft - MSFT 3M - MMM JP Morgan - JPM Philip Morris - MO Proctor & Gamble - PG SBC Communications - SBC United Tech - UTX Wal-Mart - WMT The Dow Jones Companies Company - Symbol/Quote

5. NYSE • New York Stock Exchange: countries largest and most powerful exchange • 1792- as informal outdoor exchange in new York • Restricted number of Seats on Floor-allows them to trade • Only trades stock of the largest and most established companies • Blue chip companies: Largest and best known companies…stock in high demand

6. NASDAQ • National Association of Securities Dealers Automated Quotations • OTC: Over-the-Counter (electronically) • 2nd largest securities market in the US (3rd in the world) • Links markets in US, Asia, and Europe • No trading floor…broadcast to computer terminals around world

7. Dow Jones • Dow Jones Industrial Average--- 30 companies that represent the major sectors of the American economy • Shows how certain stocks have traded on every business day • The Dow “number” is an “average” of the closing prices of the 30 companies. If the Dow is up 30 points, then the average closing price of the 30 companies is up $30. Because of all the stock splits involved, the number is not divided by 30 but by some other divisor. • GE is the only company on today’s Dow that was on the original Dow in the late 1800’s.

8. S & P 500 • Standards and Poor’s 500: Broader picture of stock performance • Track price changes of 500 different stocks as a measure of overall stock market performance • Reports stocks mainly on NYSE and some on NASDAQ

10. YESTERDAY’S STOCK REPORT HELIUM WAS UP. PAPER WAS STATIONARY. PENCILS LOST A FEW POINTS LIGHT SWITCHES WERE OFF DIAPERS REMAINED UNCHANGED THE MARKET FOR RAISINS DRIED UP BALLOON PRICES WERE INFLATED SCOTT TISSUES TOUCHED A NEW BOTTOM.

11. Stock Market Terms 1. Stock • Shares of ownership in a company • By selling stock companies can raise money to start, run, and expand business (equities: claims of ownership in the corporation) 2. Dividend • Company profit paid to stockholder (4 times a year/quarterly) What animal describes a good market? 3. Bull Market • Overall stock prices are rising

12. 4. Bear Market • Overall decline in stock prices 5. Mutual Fund • Fund that pools the savings of many individuals and invests this money in a variety of stocks and bonds • Net Change: number is how much the stock price changed from the previous day not how much the stock moved up or down during the day • Capital Gain: Difference in the higher selling price and the lower selling price • Capital loss: Investor who sells stock at a price lower than purchase price • Stockbroker: a person wholinks buyers and sellers of stocks

13. 10. Common Stock : A security that represents ownership in a corporation. Holders of common stock exercise control by electing a board of directors and voting on corporate policy. Common stockholders are on the bottom of the priority ladder for ownership structure. In the event of liquidation, common shareholders have rights to a company's assets only after bondholders, preferred shareholders and other debt holders have been paid in full. • 11. Preferred stock:Preferred stock is a mix between regular common stock and a bond -Each share of preferred stock is normally paid a guaranteed, relatively high dividend and has first dibs over common stock at the company's assets in the event of bankruptcy

14. Stocks vs. Bonds • owning stocks : ownership in a company • Owners in a company are entitled to a company’s profits (if there are any), called dividends • Another way to own money with stock is to buy low and sell high (capital gain) • owning a bond: lending money to a company • Bond holders earn interest because they have loaned money to a company • They will receive an interest payment until the bond matures and then receive the amount loaned (principal) • debt relationship in bond purchases versus ownership with stock purchases

15. Mutual Funds • “Basket of Stocks” • when they buy a mutual fund you are buying the basket • Spreads the risk: diversification