ap stock market investing

Today we will learn some financeCreate a chart like this for the stock market:

What I know: Want to know: (?s) Learned (end)

At least 2 At least 2 At least 3

Investing in the USA• Stocks

• Bonds

• Stock Market

• NYSE, NASDAQ

• Dow Jones

• Bull vs. Bear

• Industries

Investing

• Brokerage Account

• Old School – Stock Broker

• Higher fees, but advice

• New School – DIY online

• Lower fees, little to no help

A stock broker at work

• Finance degree

• Income: $50,000 and up

• Commission per trade

Famous InvestorWarren Buffett (1930-

One of 3 Richest people in the world ($52 Billion)

Successful investor

Earns only pays himself $100,000/year

“hold investments”

2 basic financial markets

&

Bonds

• Government backed• Very Safe• Low risk• Low return• Loan for a time

• Some tax free!

• Corporations also offer them

Stocks• Ownership in a

publically traded corporation

• Issued to raise capital

• Some pay dividends

• Voting rights

Let’s try one

• $1,000 investment

• Someone name a large company

Stock Exchange• Stock Market

• Place where Stocks are traded

• Most famous: NYSE

• Wall Street

• Others: NASDAQ,

• Nikkei

• London

• Hong Kong

• Chicago

Why do stocks change their price?• Supply• Demand• Financial data• News

• IPOs• Pandora• Twitter• Facebook

New York Summer 2011

Stock Symbols

• Makes trading easier

• EX: Disney = DIS

• Use finance.google.com to look them up

• Show a stock ticker

“Dow Jones”• Dow Jones” –

average 30 top US companies

• MMM, AXP, T, BA, CAT, CVX, CSCO, KO, DD, XOM, GE, GS,HD, INTC, IBM, JNJ, JPM, NKE, MCD, MRK, MSFT, PFE, PG, TRV, UTX, UNH, VZ,V, WMT, DIS

Why? Real income?

Bull vs. Bear Markets

• Bull Market

• Bear Market

• “Keynes’s ‘animal spirits’

Mutual Funds

Industries• Field of business

• Stocks follow others

• “Chinese increase car purchases”

• Tough times for biotechnology

http://www.stockmarketgame.org/

The Stock Market Game• National competition for students

• Teams compete, January – April

• $100,000 to invest, another $200,000 margin

• $15 fee per team, so we are 1 team

• Groups of 3, each different industry

• Oil/Energy, Tech/Entertainment, Food/Restaurants, Finance/Banking, Fashion/Retail

• 1 % commission

• Must by units of 100 shares (no google stock)

Other stock simulators• Marketwatch.com (regular ninos)

• Updown.com ($1,000,000 play money, earn real cash if you make good investments)

Quiz: This is Twitter’s stock ticker as of Friday’s close (and its whole life as a stock)

1. What is Twitter’s stock symbol?

2. Where is Twitter’s stock listed?

3. Approx. when was Twitter’s IPO?

4. How many shares exist?

5. Has Twitter made a profit yet? (EPS)

6. If I owned 100 shares on Thursday, how much more is my stock worth in total on Friday?

7. Should Klein have bought 100 shares on the IPO?

8. Does Twitter have a dividend?

9. What is its 52 high?

In your groups• Find 4 stocks or funds for your industry

• For each:

1.Symbol, exchange, 52 week high/low, EPS

2.Company HQ, CEO, 2013 Profits

3.Price for 100 shares of this company

4.Positive or negative news story, explain, cite source, not MLA

5.Why you think our class should buy this stock. For example: Google, because their business is growing, EPS is….. Future growth depends on companies it owns.