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Yun slideshow 08282014

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Yun slideshow 08282014

  1. 1. The Stock Market, a Big Green Money Making Machine
  2. 2. What is the Stock Market?  A stock market is a place where shares of stocks are sold and bought  The main stock markets are NYSE (New York Stock Exchange), AMEX (American Stock Exchange), and NASDAQ (National Association of Security Dealers Automated Quotations)  You can’t actually go to the stock market; you have to contact a stockbroker  A stockbroker is someone who buys or sells stocks for you for a fee (commission). Internet based brokers charge a small commission, so anyone can afford to invest!
  3. 3. Why Invest In the Stock Market?  The stock market is a great way - maybe even the best way - to grow your money  Most companies increase their value of the stock at higher rate than the bank interest rate  Some companies pay a dividend, which is like interest  Even though the stock market is riskier, if you invest correctly, it gets you much more money than keeping you money in the bank  Higher risk means higher reward  The average stock value grows faster than does the bank’s interest
  4. 4. Grandkids Age 60 Stocks: $441,056 Bank: $40,226 Your money grows faster in the Stock Market! If you start with: $500 And you add monthly: $50 Number of years 65 $1,200,000.00 $1,000,000.00 $800,000.00 $600,000.00 $400,000.00 $200,000.00 $0.00 Stock Market Bank Interest rate 8% 1% When you’re 75 $1,021,767 $51,225 Graduates High School Age 18 Stocks: $8,255 Bank: $5,865 Gets a job Age 23 Stocks: $14,174 Bank: $8,551 Starts a family Age 30 Stocks: $38,728 Bank: $15,380 Retirement Age 65 Stocks: $634,661 Bank: $44,837 Stocks Bank Age 75!
  5. 5. What is stock?  Stock is a part of the company that people can buy to own  The stock is divided into “shares” that you can buy  The money from a company’s stock funds their operations  After paying expenses, the money left over is their profit  Some companies will share their profit with their stock holders  As the company’s profit grows, the value of the stock grows Value of a share If you invested $100 in each company 2004 2014 2004 2014 Apple (AAPL) $28.06 $592.00 $100.00 $2109.76 Nike (NKE) $17.79 $72.99 $100.00 $410.29 Google (GOOG) $54.10 $527.93 $100.00 $975.84 The Gap (GPS) $24.15 $39.28 $100.00 $162.65 Disney (DIS) $23.47 $80.31 $100.00 $342.18 $500.00 $4000.72
  6. 6. How to pick the right stock  Think about popular trends and companies involved in these trends  Research the company, for example look up their revenue and profit  Think about what special events are coming up and which companies might be affected  For example, if Easter or Halloween is coming up, you might want to buy stock in Hershey. Good Signs Bad signs Promising products Products that are fads Little debt Increasing debt Increasing revenue & profit Decreasing revenue & profit Little competition Heavy competition Popular trend, high demand Staying power
  7. 7. Meet: Warren Buffett  Warren Buffett is the world’s greatest investor  He started investing at the age of 11.  In 1956 he started to invest his friends’ and family’s money  In 1965, he bought Berkshire Hathaway and over the next 50 years he continued to buy companies, such as See’s Candies and Geico Insurance.  His current net worth is 58 ½ billion dollars  He made this money from mostly investing in stocks like Coca-Cola  The way he invests is a method that everybody can use.  Patience  Extensively researching the company  Never overpaying for the stock
  8. 8. How to build your stock portfolio  A portfolio is the collection of stocks that you own  To build your portfolio, the best way is to:  Identify good companies  Buy at a low price  Hold on to your stocks for a long time  Buy lots of stocks  It is safer to invest $100 in 10 companies than it is to invest in $1,000 in 1 company  Don’t panic if your stock drops! The best thing to do is to hold.  Sometimes, it is a good idea to even buy more shares! Warren Buffett once said, “Be fearful when others are greedy and be greedy when others are fearful!”
  9. 9. Resources  McGowan, Eileen & Dumas, Nancy. Stock Market Smart. Brookfield, Connecticut: Millbrook Press, 2002.  Orr, Tamra. A Kid’s Guide to Stock Market Investing. Newark, Delaware: Mitchell Lane Publishers, 2008.  Thorndike, William. The Outsiders. Boston, Massachusetts: Harvard Business School Publishing, 2012.  Davidson, Avelyn. The Bull And The Bear. New York, New York: Children’s Press, 2008.  Great websites for beginning investors  The Motley Fool (www.fool.com)  Investopedia (http://www.investopedia.com)  The Secret Millionaires Club (www.smckids.com)  The Stock Market Game (www. stockmarketgame.org)

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