BEAR

BULL

CHICKEN

PIG

DEER

MARKET MODELS

WHY INVEST ?

WHY STOCKS ?

WHERE DOSE IT START ? ( LIFE OF A

STOCK )

WHY GET IN NOW ?

HOW TO GET IN ?

NOW WHAT ?

QUES-TIANOOOOS ?

INVESTING

•STOCKS•BONDS•MUTUAL FUNDS•START YOUR OWN BUSINESS

"investment vehicles,"

Alternative Investments: Options, Futures, FOREX, Gold, Real Estate, Etc.

Knowing Yourself

•Investment objectives•Timeframe•Investing personality.

Putting It All Together: Your Risk Tolerance

Portfolios and Diversification

“DONT put all your eggs in one basket."

Putting It All Together Investing is about making your money work for you.

Reinvesting earnings allows you to take advantage of

compounding.

Each investor is different in his or her objectives and risk

tolerance.

There isn't just one strategy that can be used to invest

successfully.

Each investment vehicle has its own unique characteristics.

Diversifying investments in a portfolio helps to manage

risk.

WHAT IS A STOCK ?

STOCK is a share in the ownership of a company.

STOCK represents a claim on the company's ASSETS and EARNINGS.

TYPES OF STOCK Common Stock Preferred Stock Different Classes of Stock

How Stocks Trade

Most stocks are traded on exchanges, which are places where buyers and sellers meet and decide on a price

Stock Market Primary Where securities are created ( by means of an IPO )

Secondary Investors trade previously-issued securities without the involvement of the issuing-companies

Third and Fourth Markets

Getting to Know Stock Exchanges

• The New York Stock Exchange ( NYSE )

Secondary , Floor, specialist,

• The National Association of Securities Dealers ( NASDAQ )

Secondary, Virtual,

• American Exchange ( AMEX ) • OTCBB

• PINK SHEET

What dose Market Indexes Tell Us ?

• An index is essentially an imaginary portfolio of securities representing a particular market or a portion of it .

Dow Jones Industrial AverageHas 30 stocks Represents company's with annual revenues in excess of $7 billion.

S&P 500 Includes 500 of the most widely traded company’sCovers about 70% of the market’s total valuemarket capitalization or market cap weighted index

The Nasdaq Stock Market CompositeMore than 5,000 Heavily weighted to technology stocks

Russell 2000 Index

NOW WE KNOW WHY INVEST ?

WHY STOCKS ?

Initial Public Offering - IPO

INVESTMENT BANK - Goldman Sachs, Merrill Lynch, Credit Suisse First Boston, Lehman Brothers and Morgan Stanley.

UNDERWRITTING -process of raising money Registration with the SEC SEC requires "cooling off period” RED HERRING - "dog and pony show" Finally, the securities are sold on the stock market and the

money is collected from investors.

NOW WE KNOW WHY INVEST ?

WHY STOCKS ?

WHERE DOSE IT

START ?

( LIFE OF A STOCK )

DOES THIS NEED ANY EXPLANIN ?

MARKET MODELS -REEVALUATION

BEAR - Pessimistic

BULL - Optimistic

CHICKEN - Lose Hands

PIG - Ho ho ho…..

DEER - Neutral

Bulls, Bears Make Money, Pigs Get Slaughtered

NOW WE KNOW WHY INVEST ?

WHY STOCKS ?

WHERE DOSE IT

START ? ( LIFE OF A

STOCK )

WHY GET IN NOW ?

Brokers and Online Trading

Brokers -- can't live with 'em, can't live without 'em.

You need some kind of broker if you want to trade

stocks and bonds.

It's up to you to pick the broker that meets your needs.

A broker acts as a middleman between the securities

that trade on the market and the investors who buy

them.

Brokers are salespeople. They get a commission when you trade.

*Dividend Reinvestment Plan (DRIP)

Brokers and Online Trading: The Costs • Opening an Account Every brokerage has different terms and conditions Minimum requirement $500 to $2500. • Commissions and Fees The dirt cheap Discount brokers who charge $5-$200 to Full-

service Expensive brokers • The Hidden Fees Fees for transferring assets both into and out of an account

· Account maintenance fees · Inactivity fees · Fees for not maintaining a minimum balance · Interest on margin loans · Sales charges on certain securities (e.g. loads on mutual funds)

Types of Accounts• What's Your Style? Investor Trader (Day Trader )

• Types of Accounts Depending on what type of securities you hold, there are four major choices you have when opening an account:

Cash Account: The basic account where you deposit cash to buy stocks, bonds, mutual funds, etc.

IRA account: For people looking to set up an individual retirement account.

Margin Account: Margin basically allows you to borrow from your broker against the cash and securities in your account. Profits can diminish quickly when you use margin, so be very careful! Learn about how this works in our margin tutorial.

Option Account: Only seasoned investors should consider this choice. This type of account allows you to trade options, which are much riskier investments than stocks or bonds.

Types of Orders • I'm ready to trade, now what?

In order to make your trade you have to be specific about how you want the transaction to be performed. The following are common order types you'll encounter when placing an equity order using an online interface or the phone:

Market order: An order that requires immediate execution at the best price available. These are generally the cheapest trades to place because there is little work or maintenance by the broker.

Limit order: An order to transact at a specified price. This guarantees the price at which you will buy or sell a security. Limit orders are usually more expensive than market orders.

Stop Order: A market order that trades after a specified level has been reached. This may be a stop-loss or stop-limit. The exact price cannot be guaranteed, but this can be a good way to protect your downside.

All or None (AON): A stipulation on a limit order either to buy or sell a security only if the broker can fill the entire order, not part of it.

Day Order: An order that expires at the end of the business day if it has not been filled.

GTC (Good Till Canceled): An order either to buy or to sell a security that remains in effect until the customer cancels it or until it is executed by the broker.

Fill-or-Kill:An order for immediate execution. If it cannot be filled immediately the order is automatically cancelled.

Short Sale: Short selling is an advanced investing technique when stock is borrowed and sold with the hopes of returning the stock at a lower price.

Buy to Cover: An order placed to close out a short position.

NOW WE KNOW WHY INVEST ?

WHY STOCKS ?

WHERE DOES IT START ? ( LIFE OF A STOCK )

WHY GET IN NOW ?

HOW TO GET IN ?

!!AAAHHH DONOOO WHAT TO DOO !!

LETS MAKE A PLAN

• LEARN THE LINGO• DO RESEARCH• MAKE A FAKE ACCOUNT – Interesting• Test ur Wits or ur Luck

Learn The Lingo

Graphs are for Engineers

RESEARCH & Expert Opinion MARKET EDGE, GOLDMAN SACH, VICKERS ,ETC TECHNICAL/FUNDAMENTAL ANALYSIS

NOW WE KNOW WHY INVEST ?

WHY STOCKS ?

WHERE DOES IT START ? ( LIFE OF A

STOCK )

WHY GET IN NOW ?

HOW TO GET IN ?

NOW WHAT ? (RESEARCH)

Research Resources

Stock Market Simulators• http://www.nationalsms.com/• http://investopedia.com

For Technical Analysis • 1. http://www.stockconsultant.com• 2. http://www2.barchart.com/• 3. http://stockcharts.com• 4. http://www.clearstation.com

Book Lovers - First Read • "Trading for a Living" by Dr. Alexander Elder.• "The Disciplined Trader: Developing Winning Attitudes" by Mark

Douglas.• On unrelated topic, read "Rich Dad, Poor Dad" by Robert Kiyosaki.