Presentation on theme: "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."— Presentation transcript:
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 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
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.
Limits Weaknesses: Original investment not guaranteed Unpredictable It all depends on the company you invest in
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
Economic Climate Not ideal for a depression in economy if 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
Where To Purchase You can buy them online. Companies like: Apple Google Yahoo Starbucks McDonalds
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.
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
Specific Example #1 You decide to buy 10 stocks in Apple on September 16 th. It costs you $450.12 per share, the lowest it’s been since August 9 th. In total, you invest $4500.12 in Apple.
Specific Example #1 You already notice growth in your stocks. However, by October 21 st, 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.
Specific Example #2 Let’s say you decided to buy shares of Apple on September 9 th. You buy 10 shares of Apple for $506.17 each. The total amount you invest in is $5060.17.
Specific Example #2 You want out of Apple because they’ve been steadily decreasing. You buying out on September 16 th 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.
Works Cited http://finance.yahoo.com/education/stocks http://stocks.about.com http://www.investopedia.com/university/stock s/http://www.investopedia.com/university/stock s/