3 - Investments - Stocks Mar 9Presentation Transcript
Investing in Stocks
What are stocks?
*When you purchase a stock (equity), you receive a piece of the
*As one of the many owners of the company, you technically own a
piece of the company.
*A company raises money by issuing stock.
*The total value of stock held by the public is the company’s market
capitalization, or "market cap".
*A stock is considered a riskier investment than a bond (debt) and
thus requires a higher rate of return.
Why Buy stocks?
*Historically, equities (Stocks) have provided superior longterm
returns compared to cash and debt investments.
Common share ownership in Canadian public companies offers
many potential benefits to investors, including:
* Capital appreciation
* Voting privileges
* Liquidity (shares can easily be bought or sold)
* Dividend tax credit and capital gains tax
Long Term Investment
*Equities do typically fluctuate more in value.
*It’s important to take a longterm perspective when investing in equities.
How can you buy them?
*The stock markets are places where buyers and sellers meet
to trade in person or electronically.
*In Canada the Toronto Stock Exchange (TSX) is the largest
stock exchange. (Founded 1878)
*Smaller market cap stocks trade on the TSX Venture
*In the US, the New York Stock Exchange (NYSE) (Founded
1792)and NASDAQ are the most important exchanges, and
are in fact the largest in the world.
Jeric wants to purchase 500 shares of Manitoba Telecom.
What will the shares cost him?
If Jeric's stock broker charges him a fee of 2% of the
order value, calculate Jeric's total cost.
Calculate Laura's total profit/loss for the following
Week 1: Laura purchases 100 shares of Astral Media
ACM.A for $26.75/share. Her broker charges her 3%
Week 2: Laura sells her shares of Astral Media for
$31.25/share. Her broker charges her 3% commission.