1. The magical place where stocks are bought and sold.
The Stock Market

2. Stocks?—What? Why? What? Why?
Companies get divided into shares/equities (same thing) and sold to the public.
Why?
So the company can generate money to start, run, or expand the business.

3. Why Should I Buy Stock? Earn Dividends—your share of the profit.
2. Earn Capital Gains—the practice of selling your shares for MORE than you paid .
WARNING:
***You could suffer capital loss—paying more for your shares than you can sell them for .

4. Classified by Voting Power
Types of Stocks
Classified by Payment
Classified by Voting Power
Income Stock– pays dividends regularly.
Growth Stock—rather than pay dividends, the company keeps your earnings and reinvests in itself.
Common Stock—these shareholders can vote.
Preferred Stock—these shareholders CANNOT vote, but the get paid first.

5. Stock Splits Why does it happen? How does it work?
Because the price of a stock becomes so high that it becomes out of reach for potential investors.
How does it work?
Each single share splits into more than one share
Example:
Before stock split: Jake owns 40 shares at $50/share.
After stock split: Jake owns 80 shares at $25/piece.

6. Who Does This Trading? Where Does It Happen?
Who?—stockbrokers who work for brokerage firms.
Where?—stocks are traded on stock exchanges (markets for buying and selling stocks)

7. Examples of Markets New York Stock Exchange-
Country’s largest and most powerful exchange.
Limited number of members who buy ‘seats’ that allow them to trade.
Only the largest and most established companies sell shares on the NYSE.
The best of the best on the NYSE are blue chip companies.

8. Examples of Markets (Continued)
2. The OTC Market- (over the counter)
Stocks that are traded electronically
May be bought directly or from a dealer.
Nasdaq –
The American market for the buying and selling of OTC securities.
Daytrading—
Traders who predict minute-by-minute activities and make many trades per day. Very high risk.

9. Measuring Performance
Bull Market—
When stocks rise steadily for a period of time.
People are making money.
Bear Market—
When stocks drop in the market for a period of time.
People are losing money.

10. Measuring Performance
The Dow Jones Industrial Average
S &P 500
Shows how 30 different stocks performed on a given day.
Represents stocks from various industries such as food, entertainment and technology
To stay current the counted in the Dow can change
Shows how 500 different stocks performed on a given day.
A broader measure of the overall stock market.
Mainly stocks in the NYSE but some are traded on the Nasdaq and other OTC markets.