Stock Market Basics

What are stocks?

• Stocks are units of ownership in a company.• Companies sell stock to get money to –

• Research better ways to make things• Create new products• Improve the products they have• Hire more employees• Enlarge or modernize their buildings

Purpose of the Stock Market

• Almost every large corporation started out as a small, mom-and-pop operation and through growth, became financial giants.

• Wal-Mart, Dell Computer, and McDonald’s had combined profits of $10.34 billion this year.

• Wal-Mart was originally a single-store business in Arkansas.

Stock Market

• Dell computer began with Michael Dell selling computers out of his college dorm room.

• • McDonald’s was once a small

restaurant no one had heard of.

How did they grow?

• How did these small companies grow from tiny, hometown enterprises to three of the largest businesses in the American economy?

• They raised capital by selling stock in themselves.

• When you buy stock, you become a shareholder, which means you now own a "part" of the company. If the company's profits go up, you "share" in those profits. If the company's profits fall, so does the price of your stock. If you sold your stock on a day when the price of that stock falls below the price you paid for it, you would lose money.

How do shareholders make money?

Stock prices can rise and fallIn the stock market, prices rise and fall every day. When you invest in the stock market, you are hoping that over the years, the stock will become much more valuable than the price you paid for it.

Rise and Fall of Stocks

YTD % CHG stands for year-to-date percentage of change. In other words, how much has the stock risen or fallen compared to where it was a year ago on today's date?

52-Wk High shows the highest selling price of the stock in the last 52 weeks.

52-Wk Low shows the lowest selling price of the stock in the last 52 weeks.

Words to Know

Stock column gives the full name of the company.

Sym is the symbol used by the company on the ticker reports generated by the stock exchanges that track the trading of each stock.

Words to Know

Volume lists the number of shares sold (in hundreds).

Last shows the stock's price at close of business yesterday.

NET CHG shows how the price has risen or fallen compared to yesterday's closing price.

Words to Know

Details on Apple (AAPL)

Coca-Cola Bottling Co. Consolidated