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Introduction to Stocks

Dive into the world of stocks with this educational guide! Learn about stock basics, trading, market indices, brokerage criteria, and opening an account. Discover the differences between stocks and bonds, what influences stock prices, and the dynamics of bull and bear markets. Start your investment journey today.

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Introduction to Stocks

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  1. Spring 2014 Accounting 101 ` Introduction to Stocks Basics of Investing I K. Robinson

  2. What is a stock? • Common stock • Gives you a “share” of ownership of a publicly traded company • Stock ownership • Voting rights • Claim to assets (behind debt holders) and earnings

  3. What is a stock? • Ticker symbols • Set of letters that represent a security traded on an exchange • Ex. MSFT, GS, AAPL, MA, BUD, LUV • Stock quotes • List of prices for a stock at a particular point during the trading day • Stock tickers • What do those green and red numbers mean?

  4. More Stock Quotes

  5. Stocks vs. Bonds • Stocks are equity • Generally considered riskier • Quite possible to lose a significant portion, if not all, of your money • Potential for high returns • Bonds are debt • Lower and usually fixed return • Higher claim than stockholders • What does this mean?

  6. What Can Cause Stock Prices to Change? EASY!  Supply and Demand!But…what affects supply / demand of a stock?

  7. What Can Cause Stock Prices to Change? • Earnings & growth expectations • Positive / negative news • Economy sentiment • Investor sentiments & attitudes

  8. How Stocks Are Traded • Major exchanges • Lists stocks (and other securities), sets policies for how stocks are traded • New York Stock Exchange (NYSE) • American Stock Exchange (AMEX) • National Association of Securities Dealers Automated Quotation • Only “publicly traded companies” are listed

  9. Markets Indices • S&P 500 • 500 stocks chosen by Standard & Poor to represent US stock market • NASDAQ Composite--With approximately 3,700 companies and corporations, it has more trading volume than any other stock exchange in the world, many of which are technology and electronics • Dow Jones Industrial Average • 30 most significant stocks traded

  10. Stocks Markets & Animals • Bull Market • When everything in the market is going great and stocks are generally heading upwards • Bear Market • When everything is NOT GOOD and stocks are generally headed downward • NOTE: Nothing lasts forever! Good times and bad times will end at some point http://www.investopedia.com/university/stocks/stocks7.asp

  11. Brokerages • Need a medium to trade through – this is where brokerages come in • Criteria • Full service vs. discount • Fees (commission) • Services / tools • Minimum balance

  12. Opening an Account • Not a hard process- most of it just some paperwork and mail • Sign-up online and download forms • Mail checks, forms, and copy of ID • Accounts created within a couple of days • What you will need: a computer, starting capital, and investing know-how

  13. Basic Idea Behind Investing in Stocks • Buy your stocks when the prices are low. • Sell your stocks when the prices are high.

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