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STOCKS and MUTUAL FUNDS

STOCKS and MUTUAL FUNDS. WHAT YOU SHOULD KNOW. What are stocks?. Shares of ownership of a company. If a company has 100 shares outstanding and you own 10 shares, you own 10% of the company. How do people make money off of stocks?. As a shareholder, you may be entitled to dividends

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STOCKS and MUTUAL FUNDS

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  1. STOCKS and MUTUAL FUNDS WHAT YOU SHOULD KNOW

  2. What are stocks? • Shares of ownership of a company • If a company has 100 shares outstanding and you own 10 shares, you own10% of the company

  3. How do people make money off of stocks? • As a shareholder, you may be entitled to dividends • Sharing company profits with shareholders • the price of the stock goes up • “Buy Low, Sell High”

  4. Why Stocks? • Traditionally they are the highest returning investment • Since 1926, about 12% a year • Since 1987, they’ve exploded

  5. THE STOCK MARKET- A PRETTY GOODHISTORY

  6. STOCK EXCHANGES • Are places where stocks are sold • Common stock exchanges are the • NASDAQ(National Association of Securities Dealers Automated Quotation System) • NYSE (You guess. . .) • AMEX

  7. SOME BIG WINNERS. . . STOCK FROM IN GAIN • Jupiter National $3 1/2 to $27 1991-93 671% • Mid-AtlanticMedical Services $2 3/8 to $27 1991-94 1,078% • Linear Technology $2 1/8 to $38 1989-95 1,688% • Micron Technology $3 to $95 1992-95 3,066% • Fastenal $7/8 to $38 1987-95 4,242%

  8. SOME TYPES OF STOCK • GROWTH STOCKS • Any stock that has a good chance of growing faster than the market • BLUE-CHIP STOCKS • Companies with good financial records that are pretty safe investments (Coca-Cola, GE, Disney are Blue Chip Stocks)

  9. SOME TYPES OF STOCK • Income Stocks • Pay high dividends, but don’t grow much • Cyclical Stocks • Do real well in a good economy, but bad in a bad economy(automotive, airlines, etc) • Defensive Stocks • Recession proof stocks (food, beverage, tobacco)

  10. SOME TYPES OF STOCK • Speculative Stocks • Big gambles • Risky but could be good

  11. THE DOW • “HOW’S THE MARKET DOING?” • The DJIA is the Dow Jones Industrial Average commonly referred to as the Dow • An average of only 30 of the big stocks (blue-chips) • Together they represent the U.S.economy as a whole.

  12. THE DOW IS MADE UP OF. . .

  13. OTHER INDEXES INCLUDE • S & P 500 • NYSE INDEX • NASDAQ INDEX • RUSSELL 2000 • WILSHIRE 5000

  14. Make Sure You Know. . . • What is the DJIA? • What are Exchanges? • What is the S & P 500? • What are blue-chip stocks? • What are dividends?

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