Exploring The Stock Market


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Exploring The Stock Market

  1. 1. Exploring the Stock Market A project for Fifth Graders at UPES Detroit, MI
  2. 2. What is a stock? <ul><li>A stock is a piece of a company. When you own one share of stock, you own one tiny piece of that company. You are a shareholder . </li></ul>
  3. 3. What kinds of companies have stocks? <ul><li>Companies that issue stock are called corporations . </li></ul><ul><li>Corporations come in all sizes. But they all have this in common: They are not owned by any one person. Every shareholder is an owner of that corporation. </li></ul>
  4. 4. Where can I buy stock? <ul><li>You must buy stock from a stock broker , a person that is licensed to sell stocks. </li></ul><ul><li>You can also buy stocks on the Internet through a brokerage , such as TD Ameritrade or E*trade. </li></ul>
  5. 5. Where does my money go when I buy a stock? <ul><li>That’s simple… the corporation gets it! </li></ul><ul><li>It uses it to pay its expenses . </li></ul><ul><li>In return, you get to help make decisions for the company by electing its Board of Directors. The more shares you own, the more votes you get! </li></ul><ul><li>Some corporations also reward their stockholders by giving them payments every year…these payments are called dividends . </li></ul>
  6. 6. What happens when I don’t want to be a shareholder anymore? <ul><li>You sell your stock, through a broker. </li></ul><ul><li>You give up your shares in the corporation and get MONEY in return. </li></ul>
  7. 7. How do I make money from stocks? <ul><li>You don’t always make money! But here’s how it works… </li></ul><ul><li>You buy shares in the company for a certain price…called the asking price . </li></ul><ul><li>The asking price changes every day . It tells you how much a stock is worth. </li></ul><ul><li>Then… </li></ul>
  8. 8. … when it’s time to sell… <ul><li>You sell your shares in exchange for that day’s asking price! </li></ul><ul><li>If you sell your shares for more than you bought them, you make a profit . </li></ul><ul><li>If you sell your shares for LESS than you bought them, you incur a loss . </li></ul>
  9. 9. Can you give us an example??? <ul><li>Sure… </li></ul><ul><li>Let’s say you buy 100 shares of Microsoft on Tuesday, April 15. The asking price that day is $54.54. </li></ul><ul><li>How much do you have to pay??? </li></ul><ul><li>$5,454.00 </li></ul>
  10. 10. Then what??? <ul><li>You decide to sell your 100 shares two weeks later. The price that day is $63.23. </li></ul><ul><li>You receive $6323 (63.23 * 100) </li></ul><ul><li>How much did you make? </li></ul><ul><li>$6323 - $5454 = $869 </li></ul>
  11. 11. What do I have to do for this project? <ul><li>You start with an imaginary $10,000 </li></ul><ul><li>Create a portfolio by using that “money” to “buy” stock of 10 different corporations. </li></ul><ul><li>These corporations must come from different sectors. </li></ul><ul><li>Track the value of your portfolio (how much it’s worth) every week for six weeks. </li></ul><ul><li>At the end of May, determine your profit or loss. </li></ul>
  12. 12. Is that all? <ul><li>Along the way, you’ll complete math assignments that involve fractions, decimals, percents, and graphs. </li></ul><ul><li>You’ll also have the opportunity to “sell” stocks that aren’t doing well and “buy” new ones from time to time. </li></ul>
  13. 13. Terms you need to know <ul><li>Wall Street </li></ul><ul><li>New York Stock Exchange </li></ul><ul><li>“ The Dow” </li></ul><ul><li>Mutual Fund </li></ul><ul><li>NASDAQ </li></ul><ul><li>52-week high & low </li></ul><ul><li>Stock </li></ul><ul><li>Share </li></ul><ul><li>Profit </li></ul><ul><li>Loss </li></ul><ul><li>Corporation </li></ul><ul><li>Broker </li></ul><ul><li>Sector </li></ul>