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

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

Reading Stock Pages

http://finance.yahoo.com/q?s=NKE

Major Stock Markets

New York Stock Exchange (NYSE)– Wall Street

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

Dow Jones

Coca Cola Home Depot AT&T American Express Bank of America Dupont GE

Nasdaq Stocks

Amazon.com Apple Costco Comcast Google Dell