1 / 9

Chapter 12

Investing in Stocks. Chapter 12. Types of Stock. Common Stock Advantages Voting Rights – Proxy Usually cheaper than preferred Disadvantages More risky – last to get money Not guaranteed a dividend. Types of Stock. Preferred Stock Advantages First to get money if company goes under

kamin
Download Presentation

Chapter 12

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Investing in Stocks Chapter 12

  2. Types of Stock • Common Stock • Advantages • Voting Rights – Proxy • Usually cheaper than preferred • Disadvantages • More risky – last to get money • Not guaranteed a dividend

  3. Types of Stock • Preferred Stock • Advantages • First to get money if company goes under • Guaranteed a dividend first • Disadvantages • No voting rights • More expensive than common

  4. Stock Values & the Return on an Investment • Terms • Stock Certificate • Par Value – stated on certificate • Market Value – what you pay • Undervalued stocks vs Overvalued • Return – how much money you make from an investment • Factors that affect price • The company • Interest rates – lower the better for stocks • The market

  5. The Securities Market • Bull and Bear Markets • Bull Market • Rising stock prices • Feeling of investor optimism • Bear Market • Period of falling stock prices – 15% or more • Investors are pessimistic about overall economy. • Securities Exchanges • NYSE – largest, 1.1 million publicly owned shares = $9 million in capital • American Stock Exchange – smaller, 250,000 shares = $2.5 million in capital • NASDAQ – medium size, mostly tech. companies

  6. The Securities Market • Over-the-Counter Market • Network of brokers who buy and sell securities not listed on exchanges • Trades down by phone or internet

  7. Investment Strategies • Short-Term Techniques • “Playing the market.” • Buying on Margin • Borrowing from your broker • Leverage – use less of your own money & buy more stocks with less money. • Selling Short • Selling stocks borrowed from a broker that must be replaced at a later time.

  8. Investment Strategies • Long-Term Techniques • Buy and Hold • Dollar-Cost Averaging • Purchase of an equal dollar amount of the same stock at regular intervals. • Helps to avoid the situation of buying high and selling low.

  9. Stock Listings • Columns • 52 Wk High and Low • Stock name abbrev. & “pf” or “s” • Div – Dividend stated as dollar per share • Yld – Yield stated as a % --annual dividend/closing price • P/E ratio – price/earnings ratio • Sales in 100’s • Highest, lowest, and closing price • Net change

More Related