Stock Market

How many industry peers can you see in a list at once?

As many as you want

Only rich people invest in the stock market.

False

The company Apple has how many shares outstanding?

5,575,000,000 shares

sticker symbol

A "Ticker Symbol" is a unique one to five letter code used by the stock exchanges to identify a company. It is called a ticker symbol because the stock quotes used to be printed on a ticker tape machine that looked like the images below. When it printed the stock quotes, it made a tick-tick-tick sound!

What makes up a "Ticker Symbol" in the United States?

Between 1 and 5 letters only

What is the most common winning investment strategies for new beginners?

Buy what you know

"Insider" stock trading means that trading stocks takes place inside a building.

False

Stock prices are set by the Securities and Exchange Commission, a regulatory agency of the U.S. government.

False

Stocks are items found in the storeroom of a grocery store.

False

preferred stock

Preferred stock generally does not have voting rights, and you generally will not find them trading on an exchange. However, preferred stock shares have the benefit of "preference" for dividend payments; if a company decides it is going to pay dividends, preferred stock holders may get a bigger share, and be paid before common stock holders. Preferred stock holders are also entitled to be paid first if a company goes bankrupt and all the assets are sold off.

stock

Stock is defined as a share of ownership of a company; if you own a company's stock, you actually own a percentage of the company itself

Stock markets are open on business days around the clock, around the world.

True

When the stock market goes up, it causes the economy to grow.

True

Diversification

diversification means to make sure you don't "put all of your eggs in one basket." Diversification means that, for example, if you are investing in stocks in the Banking, Energy, Healthcare, Manufacturing, Luxury and IT industries, you would try to spread your money as evenly as possible across these industries. Over-Diversification can also make it more difficult to manage your investments; if you are not able to follow up with company news and stay on top of your investments, things could start turning bad, and you could start losing one before you even know why! Stock diversification & sector diversification

If you had invested $100 in 1965 in the 500 stocks of the S&P500 Index, how much would you have had in 2011?

$6,072

What is a danger of over-diversification?

If your investments are spread thin, it is hard to beat the market

What is a good way to stay diversified?

Re-balance your portfolio every 3 months

What is Preferred Stock?

Stock that gets paid dividends first

Over the last 30 years or so, which investment produced the highest percentage returns?

Stocks

What does a Stock Quote represent?

The last price a seller and buyer agreed to to make a trade

Why would a stock have a ".A" at the end of its ticker symbol?

There are multiple classes of stock for this company

What is an IPO?

When a company first sells shares of stock to the public

IPO

A new issue of stock is when a private company decides to "Go Public", and issues shares of stock for anyone to buy. This is often called an Initial Public Offering, or IPO, and when large private companies go public, it can be a very exciting event with huge fluctuations in the stock's price in the first weeks while the market decides on a fair price for the shares.

What does a Stock represent?

A percentage of ownership of a company including assets and profits

Any stock that goes up in price must eventually come back down.

False

Buying stocks is a sure way to make money.

False

If the stock market goes up 30 percent one year, it will fall by 30 percent in the next year.

False

It is hard to buy a good stock today because all the good ones have already been purchased.

False

Most stocks on the stock market are sold by the United States Government.

False

Sometimes companies buy their own stocks on the stock market.

False

Bears, Bulls, and Pigs are found in the stock market.

True

Corporations sell new issues of stock on the New York Stock Exchange.

True

People can buy stocks on the Internet.

True

quotes

stock quote represents the last price at which a seller and a buyer of a stock agreed on a price to make the trade. Because stock prices are determined by a continuous auction process between buyers and sellers, stock prices change frequently as the buyers and sellers change. Prices also change as new information about that company, that industry, or the economy becomes public; this new information then changes buyers and sellers expectations of the stock's future performance.

What does it mean to "Diversify" your portfolio?

A and B

How can you tell what professional stock analysts recommend?

All of the above

What tools does HowTheMarketWorks have to help you choose stocks?

All of the above

Which of the following do not appear in the Sectors listing?

Corporate Bonds

What should you look for when buying stock of a company you know?

If their stores always seem busy

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 short names

Where were stocks first created?

Rome

Over the last 90 years, which investment produced the most volatile returns?

Stocks

dow jones

The Dow Jones Industrial Average, more frequently know simply as the Dow or the Dow Jones, is a stock market index made up of 30 of the largest publicly owned companies based in the United States. It is a price weighted index meaning that the index's price is an average of the price of the 30 stocks that make it up. Though it is price weighted, this does not mean that every time there is split the index is completely changed, as they have factors to keep the value of the index consistent.

NYSE

The New York Stock Exchange (or NYSE) is the largest stock exchange in the world. Think of it as an organized, fast-paced flea market where buyers and sellers from all over the world come to trade U.S. stocks (and now some foreign shares as well). It is where over 2,800 of the biggest U.S. companies have their shares listed. On average, over 1 billion shares are traded each day. It is located on Wall Street in New York City.

How can you find stock news about any company?

The Quotes page on HowTheMarketWorks

Which of these items can you find in a stock quote?

The stock's current daily volume

What is "Net Change"?

The total amount a stock's price has changed since the previous trading day

What is Capital Preservation?

To make sure you don't lose your initial investment

Where can you find the "Sectors" tab?

Under the "Markets" Section