Basics of stock exchange
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This document provides an introduction to the basics of stock exchanges and investing in stocks. It defines key terms like stocks, stock market, dividends, and common/preferred stocks. It also describes why companies issue stock and the main ways investors can profit from stock ownership. The document outlines several hands-on activities for learning about different types of stocks, largest companies by market capitalization, and basic online investing concepts through video tutorials.
Basics of stock exchange
- 1. Basics of stock exchange FINANCIAL LITERACY CURRICULA NEW LITERACY SET PROJECT 2015-2017
- 2. Introduction • Brainstorming • Online matching game: https://www.purposegames.com/game/basics-of-stock-exchange- initial-matching-game
- 3. STOCK MARKET AND STOCKS • stock market = place where stocks and bonds are "traded" – meaning bought and sold • stocks = units of ownership in a company, represented by a stock certificate • dividends represent a percent of the company's profit, paid to the shareholders.
- 4. WHY STOCKS? • Companies sell stock to get money to – • Research better ways to make things • Create new products • Improve the products they have • Hire more employees • Enlarge or modernize their buildings
- 5. WORKING WITH STOCKS • investment strategy = plan to allocate assets among such choices as stock, bond, cash equivalents, commodities, and real estate • Initial Public Offering (IPO) = process of creating a stock • There are basically only two ways to make money from stocks: 1. Selecting stocks that will increase in value, where you sell the stock for more than you purchased 2. Selecting stocks that have a history of paying excellent dividends, a distribution of earning to shareholders
- 6. TYPES OF STOCKS • COMMON STOCKS • PREFERRED STOCKS • ACTIVITY 1 –”WHAT IS MY LABEL” • Make 5 groups, each needs to select group leader • Refere to online Padlet wall on link https://padlet.com/info1091/rt8qcb1dnklz and to the Worksheet Stock Labels • Research the stocks you get and then write on the Padlet wall which label each stock would have and why - Be aware that one stock can have multiple labels! • After finishing the research leader of each group presents group’s work and compares the results with others
- 7. ACTIVITY 2 – FINANCIAL ADVISOR • Act as a financial advisor that needs to consult his/her client. Once again study stocks from the previous activity and give your recommendation on which stocks to buy depending on the needs and profile of the client: • Client is a retired man who has worked as a bank manager his whole life. He has a large savings, but no experience with online trading. He likes fishing and traveling. • Client is a stay-at-home mom of 2 children. She likes reading books, fashionable items and mobile phones. She has a very small amount of money saved and is looking for an opportunity to invest. • Client is an electrical engineering student. He has a small amount of money saved from working summer jobs and is looking for an adventurous investing experience. • Client is owner of a small business - local bakery. She just inherited a larger sum of money and is looking to put it into something safe and reliable. Her friends suggested stocks. • Client is owner of a large business. He deals a lot with China and Japan and is familiar with their circumstances. He is a dependable person, averse to risk and a family man.
- 8. MARKET CAPITALIZATION • market capitalization = total value of a company’s outstanding shares and the current price per share MARKET SIZE CAPITALIZATION Large Cap Over $5 billion Medium Cap $1 to $ 5 Billion Small Cap $250 million to $1 Billion Micro Cap Under $250 Million
- 9. ACTIVITY 3 – LARGEST COMPANIES BY MARKET CAP TODAY • Make 5 groups, each needs to select group leader • Visit the site http://dogsofthedow.com/largest-companies-by-market-cap.htm and look at the current largest companies by market capitalization. • You need to research all 50 companies listed. First group get first 10 companies, second next 10 companies, third next 10 and so on. While doing their research you need to fill out an online Excel or any other table which contains the following columns: • name of the company • company logo • industry sector • mayor products • country of origin • country/continent where company is present • Give at least 3 conclusions based on your research, such as which are the strongest industries today, where is the perspective for future students and/or employees, … • After finishing the research leader of each group presents group’s work
- 10. INDEXES • Indexes = group of stocks selected, according to certain criteria, to represent a specific portion of the market, industry or asset class • These are used to give investors a quick snapshot of the performance of the market • Dow Jones Industrial Average (DJIA) • Standard & Poor’s 500, 400, 600 • Dow Jones Wilshire 5000 and 4500 • Russell 1000, 2000, 3000 • NASDAQ 100
- 11. ACTIVITY 4 – ONLINE INVESTING BASICS • Make 6 groups • Each group gets 2 videos from the Youtube playlist https://www.youtube.com/playlist?list=PLFrErI4cWVHwU4ORy5i 2TuzQBvxqVbelH (Investools channel, list named investing basics) • After watching the videos each group needs to write in bullet points most important facts on Padlet wall or other online documents and present what they learned to others
- 12. AT THE END…
- 13. CROSSWORD TIME!