Stock Market Test
Why are stock indexes important?
To help investors understand the market as a whole moving
What is Capital Preservation?
To make sure you don't lose your initial investment.
Why invest?
- Possibility of making a greater profit - Can becomerich, retire early, go on vacations, etc.
How to choose stocks
-Invest in what you know - Buy the stocks that are low and sell high - Diversify your stocks
What is a market?
A place where buyers and sellers meet to exchange goods.
What is a stock?
A share or ownership of a company.
Trading Ideas
Best ways to find a good company to invest in such as... -Buying what you know - Don't trade right away, let the stock grow over time. - Check how well the company's status is, through bussiness news and stores. Good or Bad ? - Have they started opening new shops? Or are they starting to close some?
Quotes page
Finding news about any company?
All of the Above.
How can you tell what professional stock analysts recommend?
$1,612
If you had invested $100 in 1972 in the all the stocks of the S&P500 Index, how much would you have had in 2018?
Danger of over Diversification
If your investments are spread thin, it is hard to beat the market
Why would you want to diversify between sectors?
In case a sector-wide event causes all stocks to drop
Why did investors start using ticker symbols?
It was faster to move news using telegraphs with shorts names.
Buy what you know
Most common winning investment strategies for new beginners.
New Amsterdam
Name of New York City when wall street was first built.
Stocks
Over the last 30 years or so, which investment produced the highest percentage returns?
DOW Jones (Dow Jones Industrial Average)
Stock market index that measures the stock performance of 30 large companies listed on stock exchanges in the U.S.
Preferred stock
Stock that gets paid dividends first.
Ticker Symbol
The abbreviated term that is used to identify a stock for trading purposes. LeTTeRS OnLY!! (5 or less)
The New York Stock Exchange (NYSE)
The largest stock exchange in the world.
What does the stock quote represent?
The last seller and buyer agreed to make a trade.
In the late 1800s, what factors led to the growth of the NYSE?
The need for fund to finance new companies and build railroads.
What can you find in a stock quote?
The stock's current daily volume.
Net change
The total amount a stock's price has changed since the previous trading day.
Why do some companies can .A at the end of its ticker symbol?
There are multiple classes of stock for this company.
Common stock
Type of stock that most investors buy.
Supply and demand.
What determines the price of a stock in the market?
Re-balance your portfolio every 3 months
What is a good way to stay diversified?
Technology companies
What is the major focus of the NASDAQ index?
If thier stores always seem busy
What should you look for when buying stock of a company you know?
All of the above
What tools does HowTheMarketWorks have to help you choose stocks?
The industrial Revolution.
What was the biggest event leading to stocks being the most frequently traded security type on the exchange?
Bonds
What was the most frequently traded security type in the early days of Wall Street?
What is an IPO?
When a company first sells shares of stock to the public.
Outside a near buttonwood tree.
Where did the traders in the NYSE originally meet?
By computer
Where do most stock trades happen today?
Rome
Where stocks were first created.
Why do people invest in stocks?
You get to be involved in some of the comapany's management decisions, and you are entitled tosome of the company's profits.
