Indexes, Dividends

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Indexes, Dividends

  1. 1. March 8, 2009
  2. 2. <ul><li>Contest Reminder </li></ul><ul><li>Indexes </li></ul><ul><li>Dividends </li></ul><ul><li>Apple Presentation </li></ul><ul><li>Discussion </li></ul>
  3. 3. <ul><li>http://www.biz.uiowa.edu/studorgs/hawktrade </li></ul><ul><li>Submit order forms by market open tomorrow </li></ul><ul><li>Remember: All short sales must be accompanied by protective stop </li></ul>
  4. 4. <ul><li>Created as a way of evaluating overall performance of the stock market </li></ul><ul><li>May attempt to track overall market or a specific sector, e.g. Financials </li></ul><ul><li>Big Three: </li></ul><ul><ul><li>Dow Jones Industrial Average </li></ul></ul><ul><ul><li>S&P 500 </li></ul></ul><ul><ul><li>NASDAQ Composite </li></ul></ul>
  5. 5. <ul><li>Price-weighted average of 30 largest and most widely held companies </li></ul><ul><li>NYSE: DJI </li></ul><ul><li>AKA “INDP”, “Dow 30”, or “The Dow” </li></ul><ul><ul><li>On TV – INDP = level of Dow </li></ul></ul><ul><ul><li>INDU = day’s change in Dow </li></ul></ul><ul><li>As of Friday: 6,626.94 </li></ul><ul><li>Highest close: 14,164.53 (Oct. 9, 2007) </li></ul>
  6. 6. <ul><li>500 Large-Cap Companies </li></ul><ul><ul><li>Decided by Standard & Poor’s </li></ul></ul><ul><ul><li>Not necessarily the 500 largest, but most are in top 500 </li></ul></ul><ul><li>Ticker varies </li></ul><ul><ul><li>Google: .INX </li></ul></ul><ul><ul><li>Yahoo: ^GSPC </li></ul></ul><ul><li>As of Friday: 683.38 </li></ul><ul><li>Highest close: 1,565.15 (Oct. 9, 2007) </li></ul>
  7. 7. <ul><li>Average of all common stock and similar securities traded on NASDAQ </li></ul><ul><ul><li>ETF’s, preferred stock, derivatives not included </li></ul></ul><ul><li>NASDAQ: .IXIC </li></ul><ul><li>Over 3000 components </li></ul><ul><li>As of Friday: 1,293.85 </li></ul><ul><li>Highest close: 5,048.62 (March 10, 2000) </li></ul>
  8. 8. <ul><li>Can’t purchase indexes directly </li></ul><ul><li>Must purchase “index funds” </li></ul><ul><ul><li>Closed-end fund which attempts to match the performance of index </li></ul></ul><ul><ul><li>May own exact components of index (Dow 30) </li></ul></ul><ul><ul><li>Or a select few (NASDAQ) </li></ul></ul><ul><li>Several companies have etf’s </li></ul><ul><ul><li>SPDR, ProShares, iShares, etc. </li></ul></ul>
  9. 9. <ul><li>Quarterly payment to all stockholders </li></ul><ul><li>How do I receive dividend? </li></ul><ul><ul><li>3 Important Dates: </li></ul></ul><ul><ul><ul><li>X-Date </li></ul></ul></ul><ul><ul><ul><li>Record Date </li></ul></ul></ul><ul><ul><ul><li>Payable Date </li></ul></ul></ul>
  10. 10. <ul><li>X-Date </li></ul><ul><ul><li>AKA Ex-Dividend date, Ex-Date, X-Div date, etc. </li></ul></ul><ul><ul><li>Only need to own stock on this day to receive dividend </li></ul></ul><ul><ul><li>Could buy the day before and sell the day after </li></ul></ul><ul><ul><li>Two days before record date </li></ul></ul><ul><li>Record date </li></ul><ul><ul><li>All owners “of record” on this date receive dividend </li></ul></ul><ul><li>Payable date </li></ul><ul><ul><li>The day you actually receive the payment </li></ul></ul><ul><ul><li>Usually a month or so after record date </li></ul></ul>
  11. 11. <ul><li>AKA Stock Splits </li></ul><ul><li>“ 2 For 1” split </li></ul><ul><ul><li>Receive 2 shares “for” every 1 you own </li></ul></ul><ul><ul><li>Price per share cut in half, number of shares double </li></ul></ul><ul><ul><li>Value stays the same </li></ul></ul><ul><li>“ 1 for 5” split (reverse split) </li></ul><ul><ul><li>Receive 1 share for every 5 you own </li></ul></ul><ul><ul><li>Price per share multiplies by 5 </li></ul></ul><ul><ul><li>Number of shares divided by 5 </li></ul></ul><ul><ul><li>Value stays the same </li></ul></ul>
  12. 12. <ul><li>Other way to say it: </li></ul><ul><li>Company issued 50% stock dividend </li></ul><ul><ul><li>Equivalent of “3 for 2” split </li></ul></ul><ul><ul><li>You receive 50% more shares </li></ul></ul><ul><ul><li>E.G. if you owned 100 shares, 50% = 50 shares </li></ul></ul><ul><ul><ul><li>Now own 150 shares </li></ul></ul></ul><ul><ul><li>Does not affect value (more shares, lower price) </li></ul></ul><ul><li>100% stock dividend = 2 for 1 split </li></ul>
  13. 13. <ul><li>Apple Inc., (NASDAQ: AAPL) formerly Apple Computer Inc., is an American multinational corporation which designs and manufactures consumer electronics and software products. The company's best-known hardware products include Macintosh computers, the iPod and the iPhone. </li></ul><ul><li>http://www.google.com/finance?q=aapl </li></ul>
  14. 14. <ul><li>Pros </li></ul><ul><ul><li>Financially Secure Over 30 Billion in CASH </li></ul></ul><ul><ul><li>Leader in Innovation </li></ul></ul><ul><ul><li>Analyst suggest Apple is Overweight (Will out-perform market) </li></ul></ul><ul><ul><li>IPOD/IPHONE Halo Article </li></ul></ul><ul><ul><ul><li>Halo Effect---Consumers are purchasing other Apple Products because they like the IPOD/IPHONE </li></ul></ul></ul><ul><ul><li>Quality Products </li></ul></ul>
  15. 15. <ul><li>Cons </li></ul><ul><ul><li>Slow Down in Consumer Spending </li></ul></ul><ul><ul><li>No Dividend for Past 14 Years </li></ul></ul><ul><ul><li>Steve Jobs is Ill- On Medical Leave </li></ul></ul>
  16. 16. <ul><li>What Does Everyone Else Think? </li></ul>

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