STOCKS

WHY DO I CARE? BIG indicator of how economy is doing  Effects increases and decreases in taxes, interest rates, and supply of products You may NEED to invest  Social Security may or may not be available by the time you and I decide to retire Don’t be SCARED  Lots of jargon and numbers, but there’s not much to it

STOCK EXCHANGES places where buyers and sellers meet to trade securities/stock  NYSE  AMEX  REGIONAL EXCHANGES  GLOBAL EXCHANGES  NASDAQ

New York Stock Exchange Located on Wall Street in NYC The oldest, largest, and most prestigious of all exchanges in the US 1,400 seats (memberships) – some costing over $1,000,000 Lists stocks from approximately 3000 companies Companies must meet stringent requirements related to profitability and size

NYSE Lists stocks from approximately 3000 companies Companies must meet stringent requirements related to profitability and size

AMERICAN STOCK EXCHANGE- AMEX Also in NYC Lists stocks from about 1,000 companies Fourth largest exchange in the US

REGIONAL EXCHANGES Chicago, Philadelphia, Boston, Memphis Today, many of the stocks they list can also be found on the NYSE

GLOBAL STOCK EXCHANGES Sydney, Tokyo, Hong Kong, Singapore With computers and electronic trading, these markets allow for trading around the clock

NASDAQ National Association of Securities Dealers Automated Quotation The over the counter market An electronic marketplace for securities that are not listed or traded on an organized market Mostly newer companies

MEASURES OF STOCK PERFORMANCE In order to measure the performance of the stock market, indicators have been created  Dow Jones Industrial Average  Standard & Poor’s 500 (S & P 500)

DOW JONES Most popular and widely publicized on the NYSE DJ corporation started covering the average closing price of 11 active stocks, now it is up to 30 They are supposed to represent the overall activity of the entire stock market Changes from day to day are reported in points change and percentage change from the previous day’s closing

Standard & Poor’s 500 (S & P 500) Uses the price changes of 500 representative stocks as an indicator Due to the large number of stocks used, the figures reported are reduced to an index number Reports stocks from NYSE, AMEX and OTC markets

STOCK TABLES

HOW DO I READ IT? Will be variations, but in general the previous example will give you an idea of what to expect: COLUMN 1 & 2:  The highest and lowest price the stock was sold at in the last year

HOW DO I READ IT? COLUMN 3 & 4  Column 3 identifies the name of the company and the type of stock “pf” =‘s preferred stock

HOW DO I READ IT? COLUMN 5:  Annual dividend payment per share  If nothing listed then no dividend payments are made  This is common with high-growth companies that reinvest the money (housing market)  More stable companies will pay to encourage investment (utilities)

HOW DO I READ IT? COLUMN 6:  Dividend yield is the return on investment in stock (dividends/cost of shares)  in other words, how much "bang for your buck" you are getting from dividends

HOW DO I READ IT? COLUMN 7:  The price-earnings ratio is the comparison of price and the earnings per share over the last 4 quarters  Generally, if high then can expect higher return in the future and vice versa  Must compare similar companies Utilities vs. Technology

HOW TO READ IT? COLUMN 8:  Total shares traded for the day  To get the actual number traded, add two zeros to the end of the number listed COLUMN 9 & 10:  High and Low Price of stock for that day

HOW TO READ IT? COLUMN 11:  Closing Price- last trading price recorded when the market closed on the day COLUMN 12:  the dollar value change in the stock price from the previous day's closing price.  a stock being "up for the day," means the net change was positive and vice versa

WHAT DOES IT MEAN?? All of this information combined is provided primarily for one reason: 1. To enable us to determine the risks and rewards of various investments

YOU TRY IT!!!