Beruflich Dokumente
Kultur Dokumente
G1
The Language of
the
Stock Market
© Family Economics & Financial Education – Revised November 2004 – Investing Unit – Language of the Stock Market
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of
Arizona
1.12.2.G1
2 Basic Types of
Stock
Common Stock
Vs.
Preferred Stock
1.12.2.G1
Common Stock
• Common stock – shares or units of
ownership in a public corporation
– Most basic form of ownership
– One vote per share owned to determine
company’s board of directors
• Ways the stock value can change
– The dollar value increases or decreases
– Stock split occurs – shares owned by
existing stockholders are divided into a
larger number of shares
– A merger of two companies
– Dividends are paid
1.12.2.G1
Preferred Stock
Stock
Classifications
© Family Economics & Financial Education – Revised November 2004 – Investing Unit – Language of the Stock Market
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of
Arizona
1.12.2.G1
Stock Classifications
Growth Stock
Income Stock
© Family Economics & Financial Education – Revised November 2004 – Investing Unit – Language of the Stock Market
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of
Arizona
1.12.2.G1
Value Stock
© Family Economics & Financial Education – Revised November 2004 – Investing Unit – Language of the Stock Market
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of
Arizona
1.12.2.G1
Cyclical Stock
© Family Economics & Financial Education – Revised November 2004 – Investing Unit – Language of the Stock Market
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of
Arizona
1.12.2.G1
Countercyclical Stock
Speculative Stock
© Family Economics & Financial Education – Revised November 2004 – Investing Unit – Language of the Stock Market
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of
Arizona
1.12.2.G1
Blue-chip Stock
Researching A
Stock
© Family Economics & Financial Education – Revised November 2004 – Investing Unit – Language of the Stock Market
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of
Arizona
1.12.2.G1
Book Value
Price/Earnings Ratio
• Price/earnings ratio is the
relationship between the price of one
share of stock and the annual
earnings of the company (P/E ratio)
Price per share
= P/E ratio
Earnings per share of stock
Beta
• Beta measures a stocks volatility
compared to overall changes in the
stock market
– If a stock has a beta of +1.5 and the
market went up 10%, the value of the
stock is expected to rise 15%
– Average beta is between +0.5 - +2.0
– Information can be found by doing an
internet search for “Stock ticker symbol +
beta”
– A
© Family higher
Economics beta– Revised
& Financial Education indicates more
November 2004 – Investing riskof because
Unit – Language the Stock Market
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of
the stock price change Arizona
will be more
1.12.2.G1
Reading Stock
Quotes
© Family Economics & Financial Education – Revised November 2004 – Investing Unit – Language of the Stock Market
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of
Arizona
1.12.2.G1
© Family Economics & Financial Education – Revised November 2004 – Investing Unit – Language of the Stock Market
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of
Arizona
1.12.2.G1
Stock Name
YTD 52-Week Stoc Div YLD P/E Vol H Lo Close Net
% High k % 100s igh w Chg
Low
-16.3 43 36 AAR .33 2.5 22 1479 40 37 42 .
027
© Family Economics & Financial Education – Revised November 2004 – Investing Unit – Language of the Stock Market
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of
Arizona
1.12.2.G1
Dividend Yield
Percentage
YTD 52-Week Stock Div YLD P/E Vol High Lo Clos Net
% High % 100s w e Chg
Low
-16. 43 36 AAR .33 2.5 22 1479 40 37 42 .
3 027
Price/Earnings Ratio
YTD 52-Week Stoc Div YLD P/E Vol H Low Clos Net
% High Low k % 100s igh e Chg
Volume
YTD 52-Week Stock Div YLD P/E Vol High Low Close Net
% High Low % 100s Chg
-16. 43 36 AAR .33 2.5 22 1479 40 37 42 .
3 027
© Family Economics & Financial Education – Revised November 2004 – Investing Unit – Language of the Stock Market
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of
Arizona
1.12.2.G1
© Family Economics & Financial Education – Revised November 2004 – Investing Unit – Language of the Stock Market
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of
Arizona
1.12.2.G1
Close
YTD 52-Week Stoc Div YLD P/E Vol H Low Clos Net
% High k % 100s igh e Chg
Low
© Family Economics & Financial Education – Revised November 2004 – Investing Unit – Language of the Stock Market
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of
Arizona
1.12.2.G1
Net Change
YTD 52-Week Stoc Div YLD P/E Vol H Lo Clos Net
% High k % 100s igh w e Chg
Low
© Family Economics & Financial Education – Revised November 2004 – Investing Unit – Language of the Stock Market
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of
Arizona
1.12.2.G1
© Family Economics & Financial Education – Revised November 2004 – Investing Unit – Language of the Stock Market
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of
Arizona
1.12.2.G1
3 Basic Indicators
• Dow Jones Industrial Average
(“DOW”)
– Lists the 30 leading industrial blue chip
stocks
• Standard and Poor’s 500 Composite
Index
– Covers market activity for 500 stocks
– More accurate than DOW because it
evaluates a greater variety of stock
• National Association of Security
Dealers Automated Quotations
© Family Economics & Financial Education – Revised November 2004 – Investing Unit – Language of the Stock Market
(“NASDAQ”)
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of
Arizona
1.12.2.G1
Purchasing Stock
© Family Economics & Financial Education – Revised November 2004 – Investing Unit – Language of the Stock Market
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of
Arizona
1.12.2.G1
Brokers
Organized Exchanges
© Family Economics & Financial Education – Revised November 2004 – Investing Unit – Language of the Stock Market
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of
Arizona
1.12.2.G1
© Family Economics & Financial Education – Revised November 2004 – Investing Unit – Language of the Stock Market
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of
Arizona
1.12.2.G1
Regional Stock
Exchanges
• Regional Stock Exchanges
– Stocks are traded to investors
living in a specific geographical
area
• Including Boston, Cincinnati,
Philadelphia, Spokane
© Family Economics & Financial Education – Revised November 2004 – Investing Unit – Language of the Stock Market
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of
Arizona
1.12.2.G1
NASDAQ
• National Association of
Securities Dealers Automated
Quotations
– Stocks are traded in an over the
counter electronic market
– 4,000 small companies
• Company requirements are not as strict
– More volatile because companies
are young and new
– Average stock price is $11.00
© Family Economics & Financial Education – Revised November 2004 – Investing Unit – Language of the Stock Market
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of
Arizona
1.12.2.G1