1. Understanding Stocks

2. What is a stock?  A share in the ownership of a company  When you own stock, you are automatically an “owner”/”shareholder” in that particular company  (Funds – buy stocks that are bundled together)

3. How much do I own?  Ownership percentage  divide number of shares you have by the total number of shares outstanding/offered by the company  Apple 908 million shares  Own 10 shares  10/908 million – you do the math!! .01%...

4. What companies have stock?  Usually incorporate (go public)  Can stay private & ask venture capitalists to invest (risky)  Initial Public Offering – first time (Facebook)  Price determined by owners & investment bank Purpose  raise revenue, decrease own financial risk  Take out a loan (debt financing) or sell shares (equity financing)

5. What it means for the company?  Owners not the only owners any more – might not even be majority owners  Board of Directors – chosen by shareholders  Share in decision making process  Warren Buffet could become a majority share holder & make decisions!

6. What determines a stock’s price?  Initially – investment bank & owner  Supply & demand  P/E Ratio  Current events

7. Benefits of stock ownership  Making Money!!  Selling stock at a profit (stock appreciates & you sell it)  Dividend paying stocks (more steady)  Percentage of companies profits paid to shareholders  No liability

8. Risks of Stock Ownership  Bankruptcy – you are the last to be paid  Stock price can go down  Only really gain if you sell

9. The stock market  A market/exchange where stocks are bought and sold  Computerized really  NYSE – people running around  AMEX  NASDAQ  Technology companies

10. How you buy a stock

11. When do you buy??  Bull market  All going up  Bear market  All going down

12. What stocks should you buy?