Stock - SchoolRack

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30 Οκτ 2013 (πριν από 3 χρόνια και 11 μήνες)

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Stock:

Shares or a portion of a corporation


A stock owner can:

Vote on business decisions at shareholder
meetings


Hiring and firing of managers


Business expansion


Financial well being



Types of Stock

Common



True ownership of a firm, they can
pay dividends or a portion of the company’s
profits to the shareholders


Preferred



receive dividends before owners of
common stock and in the event of a failure they
receive leftover revenue before owners of
common stock. They do not have the right to
vote and dividends are fixed and are not
guaranteed.

Selling Stock

1.
Businesses must register with a stock market
such as the New York Stock Exchange

2.
Arrange for sale through an investment bank

3.
That bank schedules an initial public offering
(IPO), this can often be less than half the total
ownership.


Why?

To raise money for business purposes like expanding
production or research and development

Buying Stock

Purposes:

1.
Make profits

2.
Receive dividend payments


“Buy low and sell high”


Prices often reflect the opinions of buyers in
regard to how the company will do in the future.


Buying Disney stock could be a
“boon” because of the new Star Wars
movies due to come out in the next
few years.


Who knows?

The Stock Market

History:

Markets date back to before 1700 in England and
the Netherlands


Philadelphia


1790


New York


1792


Others in Germany, France, Los Angeles and Boston









A stock market is a physical or virtual (electronic)
location where stock is bought and sold.


Examples
:

NYSE


New York Stock Exchange

NASDAQ


National Association of Securities Dealers
Automated Quotations (Virtual Market)

Amex


American Stock Exchange

Tokyo Stock Exchange, Nikkei Index


Stock Indices

T
he stocks of certain industrial categories (such as
gas and oil) are grouped together and their
“behavior” is analyzed and reported (highs and
lows, buying and selling)



Dow Jones Industrial Average, created in 1896



includes the prices of 30 companies such as



IBM, G.E. and AT&T



Standard & Poor’s 500

Importance:

A venue for stock to be bought and sold, so
corporations can raise revenue


Opportunities for

individuals to invest



Help investors to see

trends and predict future

risks and returns

Safeguards:

SEC


Securities and Exchange Commission ensures
corporations provide accurate and current
information to the public which reduces
misinformation, speculating and increases stability


Why?

Speculation


Buying and selling stock for a short
term which is risky and similar to gambling, it also
causes the market to become unstable.


Speculative Bubble
-

when prices rise purely on
expectations beyond true values
. When investors
realize that, they begin to sell to make the most
money possible. This mass sale cause prices to drop
and investors to lose money.


This is what occurred during the stock market crash
of 1929, what was worse is that many speculated
using
borrowed

money!