Introduction to Stocks

1. Introduction to Stocks

2. What is a stock? • Stock- Share of ownership in a company • When a company is profiting a lot, usually the price of your stock will go up causing you to make money • When a company is struggling and not making as much money as expected, usually the price of the stock will go down causing you to lose money • Companies that offer stock are referred to as “public companies” or “publically traded companies” • Next I will show you general characteristics of stocks.

3. Characteristics of a Stock • Part ownership of a company • Can lose money investing in them (risky) • Can make a lot of money on them • Long-term the return on stocks is very good • Have voting privileges • Used by companies to raise money • Historically have a rate of return of 6-10% a year

4. NOTa Characteristic of a Stock • Allows you to run the day-to-day operations of the company • If the company’s stock you own goes out of business you can lose not only the money invested, but your house and cars • Very safe investment • Guaranteed to go up in value • Companies have to pay back the money they raise from selling stocks