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Stocks and Bonds Invest: To use money to earn interest or income in the hopes of making a profit. What are some examples of investments? ___________________________________.

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Presentation on theme: "Stocks and Bonds Invest: To use money to earn interest or income in the hopes of making a profit. What are some examples of investments? ___________________________________."— Presentation transcript:

1 Stocks and Bonds Invest: To use money to earn interest or income in the hopes of making a profit. What are some examples of investments? ___________________________________ ___________________________________ ___________________________________ Why do people want to invest money? ___________________________________

2 What are stocks? Stocks are shares in a corporation. –A business sells stocks to people to get money. In return, the people own part of that business. It is good for the company and the stock holders.

3 Stock Dividends Preferred Stock :Stock that offers the stockholder stated dividends / no voting rights –Example – General Motors Common Stock : Stock that gives the stockholder voting rights. May or may not get dividend –Example – Smaller businesses

4 Buying and Selling Stock People can buy stock for a certain price and then sell it at a higher price. What are these stocks? ___________________________________ ___________________________________ Where can you buy them? ___________________________________ ___________________________________

5 Where to buy and sell stocks Stockbroker: A person who is licensed to buy and sell stocks for other people. –They handle the sales “middle man” Stock Market: A place where stocks and bonds are traded. –In the US: New York City

6 Gains and Losses Capital Gain: Profit made on selling stocks –Example: If you buy 10 shares of K-Mart stock at $10 a share. You sell in 3 years for $20 a share. What is your capital gain? __________ Capital Loss: Money lost from investment –Example: If you buy 10 shares of K-Mart stock at $10 a share. You sell in 3 years for $5 a share. What is your capital loss? ___________

7 Bonds Basically an IOU The person who buys the bond is lending money to the government or corporation that sells the bond. The person earns interest.

8 Securities and Exchange Commission Government agency that regulates the trading of stocks and bonds. Tries to prevent people with inside information from making money unfairly.

9 Reading the Stock Report Name of stock (pf means preferred) 52 week high/low: Shows the high and low prices for the last 52 weeks Div: Annual dividend paid per share Sales Hds: Sales in hundreds (shares traded that day) Last: Price when market closed Net Chg: Increase or decrease in price from previous day.

10 Classwork 1. Page 97 1-9 2. Personal Economics 3. Look at a newspaper stock report and complete the worksheet.


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