The Stock Market Continued Personal Finance Mrs. Brewer.

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Presentation transcript:

The Stock Market Continued Personal Finance Mrs. Brewer

The Stock Market Game

INVESTMENT OBJECTIVES Buy and Hold Buy and Sell Rapidly Time Frame Diversify

Stocks Large Cap – Greater than 10.9 Billion Blue Chip Stocks Higher Price Best Price Stability Least Risk Minimal Growth Potential

Stocks Mid Cap – Greater than 2.3 Billion Baby Blue Chips Greater Growth Potential Small Cap – Less than 2.3 Billion Growth and Tech StocksTech Stocks Potential Big Gains High Risk

Types of Stocks COMMON STOCK Shares sold to investors Gives Voting Rights May pay Dividends PREFERRED STOCK Shares sold to investors Guaranteed Fixed Dividends (paid before common stock dividends) No Voting Rights

Types of Stocks INCOME STOCKS Pay High Dividends Price of Stock does not rise quickly Utility Companies Transportation Companies GROWTH STOCKS Fast Growing No Dividends Potential for High Growth Riskier Ebay, Starbucks

Types of Stocks CYCLICAL STOCKS Price goes up and down with economy Alcoa Caterpillar DEFENSIVE STOCKS Resilient to economic cycles Wal-mart Auto Repair Shops Food Stores

Bonds Basically an IOU Promissory Note to Pay Specific Maturity Date –Short Term 1-5 Years –Long Term Years Issued in multiples of $1,000 or $5,000 Annual or Semiannual Interest Payments

Types of Bonds Corporate Bonds Municipal Bonds Government Bonds Issued by Corporations to raise money Public entity that issues bonds Treasury Notes Savings Bonds

Mutual Funds A mutual fund is a company that brings together money from many people and invests it in stocks, bonds or other assets. 401(K) Plans

HOW TO INVEST om/watch/ / Listen for these terms: Online Brokerage Full Service Brokerage Financial Planners/Advisor Direct Purchase Plan

Investment Options Online Brokerage Full Service Brokerages Financial Advisors & Planners Direct Purchase Plan kc.htmwww.stock1.com/stoc kc.htm DRIP

Stock Tables

How to Read Stock Tables pa.org/SafeVideos/Video.aspx?id=nW93A yN8u5Ahttp://ttc.seal- pa.org/SafeVideos/Video.aspx?id=nW93A yN8u5A

Stock Market Calculations PPL Dividend $1.40 on 150 Shares. How much did we earn? WalMart Buy 200 shares at Sell them at How much was your profit? McDonald’s closing stock price? Up or Down? How much?

The Rule of 72 How long will it take to DOUBLE my $$? 72 divided by Interest Rate = # Years 72/3%= 24 years

The Rule of 72 At what Interest Rate will my $$ Double? 72 divided by Years to Double = Interest Rate 72/10 years = 7.2%

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