Financial Literacy Stock Market

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Employees of banks/ credit unions

are licensed to sell stocks that are approved by the to bank/ credit union

Selling Short

selling a stock that has been borrowed from brokerage firm and must be replaced at later date

Profit margin

show profit as a percentage (positive number)

Stop Order

An order to sell at the next available time a stock reaches are certain point.

Securities Exchange

An way for stocks, bonds, etc. to be traded by brokers

Federal Reserve System (FRS)

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Internal Revenue Service (IRS)

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U.S. Department of Treasury

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U.S. Financial Literacy and Education Commission

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Benefits of Direct Investing

1). No taxes 2). No brokerage fees 3). you are in control -1). You are stuck to that one company

Round Lot

100 or more shares

SOX: Sarbanes-Oxley Act

2002; outrage of scandals; created new standards for public companies and accounting firms

Buy and Hold

A market timing strategy where you hold a stock for a long period of time to reduce costs: dividend, price, splits

Over-the-counter Market

A network of dealers that buy and sell stocks of usually private companies

Stock Split

A ratio where the company gives out a ration of stock

Limit Order

An order to buy/sell an order at a specific price

Market Order

An order to buy/sell at market price at end of day

Discretionary Order

Allows the broker to do what he/she sees fit

Direct Investing

Allows you to buy stock directly from company

Discount Broker

Broker with limited services; costs less than a full-service broker; words at firms

National Credit Union Administration (NCUA)

Charters federal credit unions and insures saving deposits in federal credit unions

Initial Public Offering

IPO; company first offers their stock; used to raise money

Odd lot

Fewer than 100 shares

Full-service brokers

Give advice about all your financial goals Charge commission Consider all info that you provide

Financial Planners

Give you advice on your financial goals (CD's, retirement, college, debt)

Sources of Information:

Magazines, Newspapers, newsletters, annual reports, internet

Churning

Making money by just making useless trades

Auction Market

Market in which the highest bidder gets the stock

Securities and Exchange Commission (SEC)

Oversees trading and insures that the markets are fair and orderly

Annual Report

Report given out by the company describing their financial state

Oversight

Supervision to help protect investors from unlawful actions

Stockbroker

a person who gives advice as to which stocks/ securities to buy and sell

New income/ profit

money earned after expenses

Revenue

Total money earned

Secondary Market

Trading by brokers on behalf of their clients; common stocks are traded

Primary Market

Where a companies IPo first comes out

Buying on Margin

Where you borrow part of the money needed to buy a stock

Discount Broker

Works with a firm Lower commission rater Gives free reports; NO ADVICE

Online Broker

You make your own decisions Lowest commission rate Free research reports (some)

Current Ration

a companies ability to pay its current debts from assets

Stock Dividend

dividend paid in the form of new shares

Federal Deposit Insurance Corporation (FDIC)

insures your deposits in banks/ allows consumers to safely invest

National Association of Security Dealers (NASD)

nonprofit organization that monitors trading on NASDAQ

Blog

online place wehre you can find short articles about any given subject

P/E ration

price, earnings ration (Low= safe; high= fast growth)

Number of Employees

reflects growth vs. downsizing

Pension Benefit Guaranty Corporation (PBGC)

responsible for giving out pensions to those retired workers

Current stock price

the price at which investors are willing to pay for partial ownership of the company

Market Cap

the total value of a company in the stock market


Ensembles d'études connexes

Chapter 5 - Small Business Entry: Paths to Part-Time Entrepreneurship

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PA 131 - Public Fiscal Administration

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Chapter 21: Monetary and Fiscal Policy and Aggregate Demand

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