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Stock Market. Introduction to the Stock Market. What is a stock?. Partial ownership in a business Dividends = Profits paid out to stock holders four times a year or re-invested into the company Types of Stocks Common Stocks – people owning stock can vote for the directors of the company - PowerPoint PPT Presentation
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What is a stock?
Partial ownership in a business– Dividends = Profits paid out to stock holders four times a year or
re-invested into the company Types of Stocks
– Common Stocks – people owning stock can vote for the directors of the company
Example: NW Natural Gas, GM– Preferred Stock – fixed dividends, no voting privileges
Example: Nike, McDonalds Other words used for stocks
– Equities– Securities– Shares
What is the difference between a mutual fund and a stock?
Mutual fund – Investment through a broker into a fund that has
multiple stocks in many companies– Benefits:
Lower risk because you are diversifying your investment
Major Stock Markets
New York Stock Exchange (NYSE)– Wall Street
National Association of Securities Dealers Automated Quotations (NASDAQ)– Mostly technology stocks– Automated
How do I purchase stock?
Brokerage House– Full Service Brokers
Dean Witter, Merrill Lynch, Prudential Bach
– Discount Brokers Charles Schwab, Ameritrade, eTrade
Major Stock Markets
NASDAQ– National Association of Securities Dealers
Automated Quotations– Mostly Technology Stocks
General Terms
Earnings per share: Amt of profit each share is entitled
Going Public: Company plans to sell stock Share: investor’s ownership of the profits,
losses, and assets of a company Market Indices: tracks performance of
specific group or market of stocks
Market Indices
Dow Jones: index of 30 “Blue Chip” US stocks of industrial companies (financial, computer, retail companies)
NYSE: New York Stock Exchange tracks the movements of all common stocks
Nasdaq: Tracks performance of 100 of the largest most actively traded stocks
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