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Investing in Stocks




                      1
What are stocks?
*When you purchase a stock (equity), you receive a piece of the 
company. 
*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. 




                                                                        2
3
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
    * Dividends
    * Voting privileges
    * Liquidity (shares can easily be bought or sold)
    * Dividend tax credit and capital gains tax




                                                                     4
Long Term Investment
*Equities do typically fluctuate more in value. 

*It’s important to take a long­term perspective when investing in equities. 




                                                                               5
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 
   Exchange. 
   *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.




                                                                  6
Jeric wants to purchase 500 shares of Manitoba Telecom. 
What will the shares cost him?
http://cxa.marketwatch.com/tsx/en/market/quote.aspx?symbol=mbt




                                                                 7
If Jeric's stock broker charges him a fee of 2% of the 
order value, calculate Jeric's total cost.




                                                          8
Calculate Laura's total profit/loss for the following 
transactions:
  Week 1: Laura purchases 100 shares of Astral Media 
  ACM.A  for $26.75/share. Her broker charges her 3% 
  commission.




                                                         9
Week 2: Laura sells her shares of Astral Media for 
$31.25/share. Her broker charges her 3% commission.




                                                      10
Assignment #3



Questions 1 ­ 4




                  11

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3 - Investments - Stocks Mar 9