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INVESTMENT PowerPoint Presentation

INVESTMENT

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INVESTMENT

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  1. MARKETS INVESTMENT COMPANIES INDEXES OBJECTIVES FUNDAMENTALS

  2. INVESTMENT MARKETS EXCHANGE Auction Market – ‘Open Outcry’ Physical Location – Floor Traders – 18 Trading Posts New York Stock Exchange – NYSE – ‘The Big Board’ American Stock Exchange – AMEX Tokyo Stock Exchange London Stock Exchange OVER-THE-COUNTER Any securities trade not handled on an exchange The largest securities market Computer communications network – Links securities dealers Negotiated market – Broker dealers and ‘market makers’ Most all initial public offerings completed ‘over the counter’ NASDAQ – National Association of Securities Dealers Automated Quotations Three levels of reporting and tracking trades

  3. INVESTOR -Commission -No Load $$$ Mutual Fund Shares Reinvested INDEX FUND INC (Investment Company) MUTUAL FUND INC (Investment Company) Components of Return Dividends Capital Gain Income Dividends Dividend Income Interest Cap Gains (losses) Realized Stock Expenses Unrealized Management Fee - IBM - Microsoft Custodial Fee - Enron - AT&T - Fly by Night Inc. - Chevron

  4. MARKET INDEXES Performance benchmarks Dow Jones Industrial Average - DJIA invented by Charles Dow back in 1896. 30 significant stocks traded on the New York Stock Exchange and the Nasdaq Standard & Poor's 500 Index - S&P 500 An index of 500 stocks Tracks the overall performance of the American stock markets Russell 1000 Index Russell 2000 Index Russell 3000 Value Index Wilshire 5000 Total Market Index - TMWX 6,700 publicly-traded companies Dow Jones Utility Average - DJUA 15 utility stocks Tracks the performance of smaller segments of the stock markets Dow Jones Transportation Average - DJTA 20 transportation stocks Tribune/Bloomberg Index Utah’s 32 largest publicly held companies

  5. INVESTOR -Commission -No Load $$$ Mutual Fund Shares Reinvested INDEX FUND INC (Investment Company) MUTUAL FUND INC (Investment Company) Components of Return Dividends Dividends Dividend Income Interest Capital Gain Income Cap Gains (losses) Realized Unrealized Stock Expenses Management Fee - IBM - Microsoft Custodial Fee - Enron 72% of Index Funds Outperform their Mutual Fund Equivalent - AT&T - Fly by Night Inc. - Chevron

  6. Investment Objectives Different types of investments whose performance reflects theinvestors’ goals based on their time horizon, risk tolerance and personal wishes

  7. Capitalization Shares Outstanding (x) Market Price per share 314,870,600 x $ 358.04 = $28,180,918,700 = $28B Large Cap = $10 B – $200 B Mid Cap = $2 B – $10 B Small Cap = $300 M – $2 B Value Blend Growth Stocks of Companies that have a low P/E ratio relative to their peers Stocks whose revenues and /or earnings are or will be growing faster than their peers

  8. Price/Earnings (PE) Ratio? Current Price per Share = Price/Earnings Ratio Earnings per Share Price Earnings Ratio Risk Price Earnings Ratio Risk

  9. DIVERSIFICATION ALLOCATION HISTORICAL PRICING MODELS MANAGING THE MANAGERS INVEST MORE MONEY!