3.  Preferred Stock  Common Stock  Stockbroker  Stock Exchange  Market Value

4. Stockholder When you buy shares in a corporation. Stock Certificate A physical form showing your ownership Dividends If the business is successful it may pay out some of its profits to its shareholders. *Investing in a corporation can be a risk and you may end up losing money on the investment.

5. Preferred Stock Has priority over common stockholders in the payment of dividends. The dividends are typically set rates. Less risky than common stock but typically do not have any voting rights.

6. Common Stock General ownership in a corporation and a right to share in profits. Part owner of the corporation and no set dividend rate. Dividends are paid after preferred stockholders. Entitled to one vote for each share of stock.

7. Purchasing stock is a very important investing decision because of the possibility of a loss. Stockbrokers A licensed specialist in the buying and selling of stock. Charge a commission for their services. Two Types Full Service Discount Broker

8. Online Investing Brokers operate online for quicker access Become your own financial planner Less expensive Inexperience can be difficult

9. Stock Exchanges A business organization that accommodates the buying and selling of securities. Ex. New York Stock Exchange (NYSE) Over the Counter (OTC) use phones and the internet rather than on an exchange to buy and sell securities. Ex. National Association of Security Dealers Automated Quotations (NASDAQ)

10. Stock Values Market Value The price at which a share of stock can be bought and sold in the stock market. Listings are both in the paper and online Values can change due: Success of the business, economic conditions, politics, world events, and others. http://finance.yahoo.com/ Measurement can also be based upon a stock index. Dow Jones Industrial Average Dow Jones Industrial Average (30 of the largest U.S. companies) Standard and Poor’s Standard and Poor’s (S & P 500) (500 Major Companies)

12. Research – Online, Brokers, and Publications on company data including net worth, debt, sales revenue dividends, and more. Economic Factors Inflation High prices = Lower spending = less profits Interest Rates Cost of money can increase or decrease profits. Consumer Spending Consumer buying habits Employment People need to be working to spend their money

13. Company Factors Has the company been profitable? Has the company made good business decisions? Does the company have the potential for growth? Does the company have to much debt? How does the company compare to its competitors?