preferred stock common stock stockbroker stock exchange market value
TRANSCRIPT
Stock Investments
Vocabulary
Preferred Stock
Common Stock
Stockbroker
Stock Exchange
Market Value
Introducing Stock
StockholderWhen you buy shares in a corporation .
Stock Certificate A physical form showing your ownership
DividendsIf the business is successful it may pay out some of its profits to its shareholders.
*Investing in a corporation can be a risk and you may end up losing money on the investment.
Types of Stock
Preferred StockHas priority over common stockholders in the payment of dividends.
The dividends are typically set rates.
Less risky than common stock but typically do not have any voting rights.
Types of Stock
Common StockGeneral ownership in a corporation and a right to share in profits.
Part owner of the corporation and no set dividend rate.
Dividends are paid after preferred stockholders.
Entitled to one vote for each share of stock.
Stock Transactions
Purchasing stock is a very important investing decision because of the possibility of a loss.
StockbrokersA licensed specialist in the buying and selling of stock.
Charge a commission for their services.
Two Types
Full ServiceDiscount Broker
Stock Transactions
Online InvestingBrokers operate online for quicker access
Become your own financial planner
Less expensive
Inexperience can be difficult
Stock Transactions
Stock ExchangesA business organization that accommodates the buying and selling of securities.
Ex. New York Stock Exchange (NYSE)
Over the Counter (OTC) use phones and the internet rather than on an exchange to buy and sell securities.
Ex. National Association of Security Dealers Automated Quotations (NASDAQ)
Stock Transactions
Stock ValuesMarket Value The price at which a share of stock can be bought and sold in the stock market.
Listings are both in the paper and online
Values can change due: Success of the business, economic conditions, politics, world events, and others.http://finance.yahoo.com/
Measurement can also be based upon a stock index. Dow Jones Industrial Average (30 of the largest U.S. companies)Standard and Poor’s (S & P 500) (500 Major Companies)
How to Read a Stock Quotation
Stock Selection Research – Online, Brokers, and Publications on company data including net worth, debt, sales revenue dividends, and more.
Economic Factors
InflationHigh prices = Lower spending = less profits
Interest RatesCost of money can increase or decrease profits.
Consumer SpendingConsumer buying habits
EmploymentPeople need to be working to spend their money
Stock Selection
Company Factors
Has the company been profitable?
Has the company made good business decisions?
Does the company have the potential for growth?
Does the company have to much debt?
How does the company compare to its competitors?