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Introduction to the Stock Market. The Basics of Stock Investing. 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 Some stocks pay dividends. Stocks vs. Bonds. Your Money.
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Introduction to the Stock Market The Basics of Stock Investing
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 Some stocks pay dividends Stocks vs. Bonds Your Money U.S. Gov’t 5-Year Bond $1,000 $30 per year You are paid 3% interest
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
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
Key Stock Indices • S&P 500 Index • Largest 500 companies by $ value • Dow Jones • 30 very large American companies • Nasdaq • primarily technology stocks indices track the performance of a large # of stocks You can invest in indices through index funds
Industry Type Sectors of Stock Market • Technology • Transportation • Retail • Financials • Energy • Health Care • Defense • New Industries (looking to the future…)
