NOTES – Stock Market
Shares – stocks are sold in denominations of shares
Portfolio – A collection of investments
Ticker Symbol – a series of letters used to refer to a stock (PEP is Pepsi, KO is Coca Cola, GM is
General Motors). Usually 3 letters, many foreign stocks have 4 letters
Stock Exchange – a market in which stocks are bought and sold.
Some common stock exchanges are NYSE, NASDAQ (National Association of Securities Dealers
Automated Quotations)
Dow (Dow Jones Industrial Average) – the stock index that contains 30 major U.S. companies,
including Home Depot, Wal-Mart, Exxon, Microsoft, Apple
NASDAQ – the world’s first electronic stock market. The NASDAQ is traditionally home to only
technology stocks.
S&P 500 – an index of 500 stocks in a variety of industries. It’s the leading indicator of how the
stock market is performing.
IPO (Initial Public Offering) – the first time shares of a company are offered for sale to the
public. Companies will do this to generate income.
Mutual Fund – a collection of stocks, bonds, other investments managed by a professional fund
manager. It is less risky than stocks
Volatility – When the price of a stock fluctuates greatly (goes up and then down)
This indicates that the stock is a risky investment
Stock Split – When a company divides their existing shares into multiple shares
The number of shares increases but total dollar value of the shares remains the same
A company will do this if they feel stock price has gotten too expensive for people to buy
Bull Market – A period where stock prices generally increase
Bear Market – A period where stock prices generally decrease
Dividend – Money paid to all shareholders based on the company’s earnings
Paid by stable companies, not “fast growers”
Diversify - Owning investments in different industries or different types of investments
This is a good idea so that you will lower your risk
Capital Gain – when an investment increases in value