Presentation Transcript

1. Common Cents Investment Group September 24th 2012
2. Agenda Survey Results Today in the Market Exchange Traded Funds (ETF) Investment Research Placing an Order Membership
3. Survey Results Why did you join? Learn about investing & leadership positions Encouraging for us! Leadership positions are determined towards the end of the year…your involvement matters! Socials& volunteering opportunities are being planned
4. Survey Results Topics wanted? Practical methods, detailed analysis, & daily trends and news “Want to hear from successful investors” “Advice on how to invest small amounts of money” “Penny stocks” We will be attempting to meet all of these expectations
5. Survey Results Ever put real money in? About 50/50 Level of Experience? (1-5) A majority are a 1 or a 2 Will you buy a T-shirt? A majority – Yes! Final design will be sent out to members along with a pre-order form If anyone has a better design idea…email us!
6. Today in the Market
7. Today in the Market http://seekingalpha.com/article/882911-without-steve-jobs-apple-is-without-a-map
8. Today in the Market We touched on Facebook last time…something we stumbled upon http://video.cnbc.com/gallery/?video=3000118054&play=1
9. Useful Definitions Dividend: A distribution of a portion of a company’s earnings, decided by the board of directors, to a class of its shareholders Often quoted in the “Dividends per share” Stable companies offer them to compensate to slow growth, while aggressive companies reinvest Most often annually, biannually, quarterly Security: An ownership position (stock), creditor relationship (bond), or rights to ownership (option) More on this in the future!
10. Exchange Traded Funds A quick clip… http://www.investopedia.com/video/play/understanding-etfs/#axzz27PdKYqcp
11. Exchange Traded Funds ETF: A security that are created to behave the same way as a specific index or a collection of different securities. Very useful tool to diversify your portfolio Similar to a stock in that you can buy/sell/short/etc. on a daily basis One example: Vanguard Dividend Appreciation (VIG) http://finance.yahoo.com/q?s=vig&ql=1
12. Investment Research Business Analysis Accounting Analysis Financial Analysis Valuation Value Line
13. Investment Research Procter & Gamble
14. Business Analysis Procter & Gamble Competitive advantages? Brand names? Ability to raise prices with inflation? Economic moat? Industry and type of product? Consistency?
15. Accounting Analysis Do the firm’s accounting policies reflect the business reality of the firm? If not, we must make adjustments More on accounting analysis later. Yes, it needs its own week (or two…)
16. Financial Analysis Balance Sheet: A list of the things owned and owed by the firm and the difference between the two Income Statement: A list of the resources acquired and consumed by a firm over a period of time Cash Flow Statement: A list of the flows of cash in and out of a company over a period of time
17. Financial Analysis Balance Sheet for P&G SH Equity = Assets - Liabilities
18. Valuation Definition: The process of determining the current worth of an asset of company Very broad understanding of a company Morningstar Style Valuation
19. Value Line An independent investment research and financial publishing firm Good starting point Usually a reliable source for objective data aggregated in a consistent format It’s generally a good idea to ignore Value Line’s predictions (or any analyst predictions for that matter)
20. Value Line
21. Placing an Order Charles Schwab
22. Placing an Order
23. Placing an Order Types of Actions Buy – To purchase the asset into your portfolio Sell – To get rid of an asset from your portfolio to roll over funds into new assets or remove funds from account Sell short – Selling a ‘Security’ that is not yours and Covering it in the future
24. Placing an Order Selling Short When an order is placed…securities are borrowed from your broker and sold immediately Funds go into your account and you are required to Cover the securities in a certain time period Typically, short sales are left open for a long time You must pay the lender any dividends or rights declared during the sale Great solution if you believe the security will lose value in the future
25. Placing an Order Margin Account A brokerage account where the broker lends the customer cash to purchase securities Can use this money as leverage Profits and losses can be magnified greatly Beware: Very risky!
26. Placing an Order Types of Orders Market Brokers buy/sell for the current market price Therefore…no price needs to be specified Limit An order to buy or sell a set number of shares at a specified price or better A Limit Order guarantees price, but not an execution Buy Limit: Specified at a price lower than market price Sell Limit: Specified at a price higher than market price Stop Loss Similar to limit, buy or sell at a certain price Limit downside of short sell Protect existing profits
27. Placing an Order Types of Orders Stop Limit Combines stop order (1) with limit order (2) Control when the trade takes place Risk that the stop price is reached, but the limit price is never reached and the order will never be filled Trailing Stop A Stop Loss order set at a percentage level below the market price Designed for long position
28. Membership $20 Cost is only $20 for the whole year! Benefits: Member of a very beneficial and informative club that will inevitably be valuable in your future A network of friends who share a similar interest in investing and personal finance A virtual portfolio challenge that will strengthen your confidence in investing
29. Membership Make sure to check out our website for the presentations Monday night | ccig.osu.edu Get on our Facebook page and like us! www.facebook.com/ccigosu
30. Additional Info Wallstreet Journal discount for students 75% original price for students! Visit www.wsj.com/semester for more info
31. Questions? ? Questions, comments or concerns?