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Common Stocks

Common Stocks. Gracelyn Aki Period 7 10/21/13. Define the broader group of investments this tool belongs to. Common Stocks are the basic group for all types of stocks that people can invest in. Definition Buying parts of a company. Features. Strengths: Easy to buy and sell

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Common Stocks

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  1. Common Stocks Gracelyn Aki Period 7 10/21/13

  2. Define the broader group of investments this tool belongs to. • Common Stocks are the basic group for all types of stocks that people can invest in. • Definition • Buying parts of a company

  3. Features Strengths: • Easy to buy and sell • Easy to find information about stocks due to the internet • 11,000 public companies in North America to chose from • Companies are labeled with typically 3-4 letters called “tickers” • Google – GOOG, Apple - AAPL

  4. Example The price of 1 share of Apple is $100 dollars. You buy a share of Apple the day before the iPhone 6 is released. Apple gains billions of dollars from the iPhone 6 and the price of the stock increases to $10,000. If you decide to cash out now, you receive $9,900 more than you originally invested by just doing nothing.

  5. Limits Weaknesses: • Original investment not guaranteed • Unpredictable • It all depends on the company you invest in

  6. Type of Investor • In the know about starting companies • Know the insides and outs of companies • Know how companies work • Have a favorite company they want to help out • Good judgment about what people want

  7. Economic Climate • Not ideal for a depression in economyif you already have stocks invested • Ideal to buy stocks when they’re cheap/down • When there’s a lot of new businesses popping up • When people are more willing to spend money

  8. Where To Purchase • You can buy them online. • Companies like: • Apple • Google • Yahoo • Starbucks • McDonalds

  9. How Much? • As much as one stock counts in a company • The cheaper you buy the stock for, the better (assuming the stock is guaranteed to rise) • Ideally want to buy more than one stock depending on how cheap it is • The more stocks you have in a company, the more money you make off the company.

  10. Risk Level • High risk level • Due to the unpredictability of companies and their products • Can lose your money in a heartbeat • Money not guaranteed back

  11. Specific Example #1 You decide to buy 10 stocks in Apple on September 16th. It costs you $450.12 per share, the lowest it’s been since August 9th. In total, you invest $4500.12 in Apple.

  12. Specific Example #1 You already notice growth in your stocks. However, by October 21st, you decide to cash out all of your shares of Apple. You receive $5210.36. You originally invested $4500.12. You gained $710.24 dollars in 35 days, which is $20.29 a day for doing nothing but invest in stocks.

  13. Specific Example #2 Let’s say you decided to buy shares of Apple on September 9th. You buy 10 shares of Apple for $506.17 each. The total amount you invest in is $5060.17.

  14. Specific Example #2 You want out of Apple because they’ve been steadily decreasing. You buying out on September 16th is a terrible idea because it’s the lowest the stock has ever been. It’s selling at $450.12 per share, when you initially bought it at $506.17. If you were to sell out now, you’d lose $560.05 total.

  15. Works Cited • http://finance.yahoo.com/education/stocks • http://stocks.about.com • http://www.investopedia.com/university/stocks/

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