By: Bradley Sarasin
Stock – An Overview
• Companies will sometimes issue stock as a way
of raising money
• By purchasing stock, investors become entitled
to a share of that company’s assets
Stock Exchanges
• Two types
– Physical (NYSE)
– Electronic (NASDAQ)
Four Largest Stock Exchanges by Market Cap:
1.
2.
3.
4.
NYSE Euronext (New York)
NASDAQ OMX (New York)
Tokyo Stock Exchange
London Stock Exchange
Trading Stocks
•Investors can make money by buying or selling stocks.
•Most investing is facilitated through brokerage firms
•act as a ‘middle man’ between the investor and the
exchange.
Investor
Broker
Floor
Broker
(Exchange)
Investor notifies
broker that they
would like to
buy/sell a
specific stock
Broker notifies
floor broker at
the stock
exchange to
buy/sell this
stock
Floor broker goes to the
company (on the trading
floor) that specializes in
this stock, and
purchases the requested
amount.
Choosing a Stock to Purchase
•Stock prices
•fluctuate based on the current market.
•depending on the supply and demand of the
specific stock, the price will go up or down.
•Investors use different strategies to chose stocks,
and when to buy and sell them.
Bull Market
Bear Market
New York Stock Exchange
• the largest stock exchange
in the world
• many “blue chip”
companies (like Wal-Mart
and Coca Cola) are traded
on the NYSE
NASDAQ Stock Exchange
• the second largest stock
exchange
• entirely electronic
Stock Market Indexes
• Used to measure the performance of a segment of the
stock market.
• Comprised of different publicly traded companies and will
show a general trend of the current market.
• Two types
• national - can be used to gauge a country’s economy
• global - not restricted to a specific area.
The Dow Jones
The Dow Jones Industrial Average (DJIA) is an index of thirty large
corporations based in the United States. It is often used as a ‘barometer’ of
the American economy.
•3M
•Alcoa
•Altria Group
•American Express
•American Int’l
•AT&T
•Boeing
•Caterpillar
•Citigroup
•Coca-Cola
•Dupont
•Exxon Mobil
•General Electric
•General Motors
•Hewlett-Packard
•Home Depot
•Honeywell
•IBM
•Intel
•J&J
•JPMorgan
•McDonald’s
•Merck
•Microsoft
•Pfizer
•P&G
•United Tech
•Verizon
•Wal-Mart
•Walt Disney