Major stock exchanges
NASDAQ, NYSE
Bull Market
a period of rising stock prices
bear market
A steady drop in the stock market over a period of time
Merger
Stock change
common stock
Let's you vote
preferred stock
A special type of stock whose owners, though not generally having a say in running the company, have a claim to profits before other stockholders do.
Stocks
shares of ownership in a company
Why companies issue stock
When a company would like to grow, it issues stocks to raise funds and pay for ongoing business activities
profits
monetary gain through business
Dividends
payments of cash from a corporation to its stockholders
reasons stock prices change
You take the total return divided by the number of money invested.
Value stock
stock from a company which has a low market price considering historical earning records and value of current assets
Blue Chip Stock
the stock of a large, well-established and financially sound company that has operated for many years
Income stock
pays higher-than-average dividends compared to other stock issues
growth stock
A stock from a company which has a consistent record of relatively rapid growth and earnings in all economic conditions.
cyclical stock
a stock that tends to rise and fall with the economy
Counter cyclical stock
These stocks represent companies which give consistent returns even when the economy is suffering
Speculative stocks
stocks in relatively new firms that don't have an established track record of success
Diversification purposes
Money invested in a variety of investment tools
How to read a stock table
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DJIA
a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the Nasdaq
Standard and poors
500 Index Tracks the stock market activity for 500 stocks.
NASDAQ
A nationwide electronic system that links dealers across the nation so that they can buy and sell securities electronically.
Rate of Return Calculation
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Why do companies like to issue stock
Pays for ongoing business and to grow the company