The Stock Market

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The Stock Market
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What is Stock?

• Stock is a paper certificate proving partial
  ownership of a company.

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Security

• Proof that the holder owns something or is owed a
  sum of money.
• Examples?

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Why is Stock issued?

• Corporations issue stock to raise operating
  capital.

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How does an investor benefit from owning stock?
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Voting Rights

• Owning stock may entitle the shareholder to a
  vote in the company.
• If someone owns more than 50 they control the
  votes.

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Dividend

• A share of the companys profits
• Normally paid quarterly

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Profit from sales

• Rule of Thumb
• Buy Low Sell High

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Baseball Card Analogy
Primary Market
Private Collector
Private Collector
Secondary Market
(Stock Exchange)
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Income Stock

• Solid company that pays a good dividend.

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Growth Stock

• Company that pays a low dividend, but uses
  capital to expand and grow.
• Speculator

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What causes stock prices to rise or fall?

• DEMAND
• The companys profits
• Attractive
• Unattractive
• Psychology
• Current Events

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How is stock purchased?

• Brokers purchase stock on behalf of their
  customers for a commission
• Must be members of the exchange.
• Online

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What is the New York Stock Exchange?

• Established in the 1700s as a place to trade
  stock
• Americas largest exchange
• Secondary Market
• 1366 Members
• 2800 Companies Listed

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Steps to Buying/Selling Stock

• Decide to Buy/Sell Stock
• Contact Broker
• Order sent to Booth at NYSE
• Order given to Floor Rep
• Trading Post
• Specialist
• Buy or Sell is carried out
• Price is adjusted
• Account is settled

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What is NASDAQ?

• National Association of Securities Dealers
  Automated Quotation System
• Over the Counter Market

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What is the Dow Jones Industrial Average?

• The average of 30 big companies.

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SEC

• Securities and Exchange Commission

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