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STOCKS

STOCKS. What are STOCKS?. Stock represents a share of ownership You are a shareholder of the company The more shares you purchase, the higher percentage of the company you own. OWNERSHIP.

nelle-shelton
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STOCKS

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  1. STOCKS

  2. What are STOCKS? • Stock represents a share of ownership • You are a shareholder of the company • The more shares you purchase, the higher percentage of the company you own

  3. OWNERSHIP The percent of a company that you own is calculated by dividing the number of shares owned by the number of shares of stock outstanding: Example: 100,000 shares outstanding in CIT Corporation You own 1,000 shares ((1,000/100,000)x100=1% of ownership To make a difference in the company you must own a lot of shares!

  4. The “PROCESS” • Company goes public Only public companies offer stock for sale Why do companies go public? Demand for product and service is so great they need more capital to expand their business • IPO (Initial Public Offering) First time stock is available to the public (to buy)

  5. Where are STOCKS listed? STOCK EXCHANGES: A platform (live, electronic, or both) for investors to buy and sell stock with each other. Three major US Stock Exchanges • New York Stock Exchange (NYSE) • American Stock Exchange (AMEX) • NASDAQ Stock Market Companies select which exchange to list or trade their stock on.

  6. Who sells STOCKS? • Stock Traders - the actual company - Individuals - firms Examples: Proctor & Gamble Fifth Third Bank Merrill Lynch Ameritrade E-trade

  7. How I can purchase STOCK? • On-line Using the internet to buy/sell • Companies Location Go on-sight to purchase directly from the company • Stock Brokers Utilize a second party to handle your trading

  8. Forms of STOCKS There are two basic forms of stock: • Common Stock • Preferred Stock

  9. Provides holder right to vote on major company issues Value can change rapidly High risk Cheaper to invest in Not guaranteed a dividend Paid last Do not have voting rights Value does not change very much Not as risky More expensive to buy Typically dividend is guaranteed Always paid first Common Stock vs Preferred Stock

  10. Common Stock = Preferred Stock • Bought/Sold in the same manner • Company can offer both common and preferred stocks • Signifies ownership in the issuing company • Both trade on the stock exchanges

  11. How are STOCKS recognized on the Exchanges? Stock Symbol or Ticker Symbol • A way used to uniquely identify publicly-traded share of a particular stock • It may consist of letters, numbers or a combination of both

  12. FITB = Fifth Third Bank PG = Proctor & Gamble GE = General Electric KO = Coca-Cola MSFT = Microsoft WMT = Wal-mart K = Kellogg AAPL = Apple, Inc. JNJ = Johnson & Johnson EBAY = EBAY Example Ticker/Stock Symbols

  13. COMING SOON • Stocks - Classifications? • What are Mutual Funds? • Tips to successful investing. • The S.M.G. (Stock Market Game)

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