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

Four Largest Stock Exchanges by Market Cap:

1. NYSE Euronext (New York)2. NASDAQ OMX (New York)3. Tokyo Stock Exchange4. London Stock Exchange

Stock Exchanges• Two types

– Physical (NYSE)– Electronic (NASDAQ)

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

NASDAQ Stock Exchange• the largest stock

exchange in the world• many “blue chip” companies (like Wal-Mart and Coca Cola) are traded on the NYSE

• 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 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

The Dow Jones