STOCKS

What are STOCKS?

Stock represents a share of ownership

You are a shareholder of the company

The more shares you purchase, the higher percentage of the company you own

OWNERSHIP

The percent of a company that you own is calculated by dividing the number of shares owned by the number of shares of stock outstanding:

Example:

100,000 shares outstanding in CIT Corporation

You own 1,000 shares

((1,000/100,000)x100=1% of ownership

To make a difference in the company you must own a lot of shares!

The “PROCESS”

Company goes publicOnly public companies offer stock for sale

Why do companies go public?Demand for product and service is so great they need more capital to expand their business

IPO (Initial Public Offering)First time stock is available to the public (to buy)

Where are STOCKS listed?

STOCK EXCHANGES:A platform (live, electronic, or both) for investors to

buy and sell stock with each other.

Three major US Stock Exchanges1. New York Stock Exchange (NYSE)2. American Stock Exchange (AMEX)3. NASDAQ Stock Market

Companies select which exchange to list or trade their stock on.

Who sells STOCKS?

Stock Traders- the actual company- Individuals- firms

Examples:Proctor & GambleFifth Third BankMerrill LynchAmeritradeE-trade

How I can purchase STOCK?

On-line

Using the internet to buy/sell

Companies Location

Go on-sight to purchase directly from the company

Stock Brokers

Utilize a second party to handle your trading

Forms of STOCKS

There are two basic forms of stock:

Common Stock

Preferred Stock

Common Stock vs Preferred Stock

Provides holder right to vote on major company issues

Value can change rapidly

High risk

Cheaper to invest in

Not guaranteed a dividend

Paid last

Do not have voting rights

Value does not change very much

Not as risky

More expensive to buy

Typically dividend is guaranteed

Always paid first

Common Stock = Preferred Stock

Bought/Sold in the same manner

Company can offer both common and preferred stocks

Signifies ownership in the issuing company

Both trade on the stock exchanges

How are STOCKS recognized on the Exchanges?

Stock Symbol or Ticker Symbol

A way used to uniquely identify publicly-traded share of a particular stock

It may consist of letters, numbers or a combination of both

Example Ticker/Stock Symbols

FITB = Fifth Third Bank

PG = Proctor & Gamble

GE = General Electric

KO = Coca-Cola

MSFT = Microsoft

WMT = Wal-mart

K = Kellogg

AAPL = Apple, Inc.

JNJ = Johnson & Johnson

EBAY = EBAY

COMING SOON

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