Common Stocks

Gracelyn AkiPeriod 710/21/13

Define the broader group of

investments this tool belongs to.• Common Stocks are the basic group

for all types of stocks that people can invest in.

• Definition• Buying parts of a company

Features

Strengths:• Easy to buy and sell• Easy to find information about stocks

due to the internet• 11,000 public companies in North

America to chose from

• Companies are labeled with typically 3-4 letters called “tickers”• Google – GOOG, Apple - AAPL

Example

The price of 1 share of Apple is $100 dollars. You buy a share of Apple the day before the iPhone 6 is released. Apple gains billions of dollars from the iPhone 6 and the price of the stock increases to $10,000. If you decide to cash out now, you receive $9,900 more than you originally invested by just doing nothing.

Limits

Weaknesses:

• Original investment not guaranteed

• Unpredictable

• It all depends on the company you invest in

Type of Investor

• In the know about starting companies

• Know the insides and outs of companies

• Know how companies work

• Have a favorite company they want to help out

• Good judgment about what people want

Economic Climate

• Not ideal for a depression in economy if you already have stocks invested

• Ideal to buy stocks when they’re cheap/down

• When there’s a lot of new businesses popping up

• When people are more willing to spend money

Where To Purchase

• You can buy them online.

• Companies like:• Apple• Google• Yahoo• Starbucks• McDonalds

How Much?

• As much as one stock counts in a company

• The cheaper you buy the stock for, the better (assuming the stock is guaranteed to rise)

• Ideally want to buy more than one stock depending on how cheap it is

• The more stocks you have in a company, the more money you make off the company.

Risk Level

• High risk level • Due to the unpredictability of

companies and their products• Can lose your money in a heartbeat• Money not guaranteed back

Specific Example #1

You decide to buy 10 stocks in Apple on September 16th.It costs you $450.12 per share, the lowest it’s been since August 9th.

In total, you invest $4500.12 in Apple.

Specific Example #1

You already notice growth in your stocks.However, by October 21st, you decide to cash out all of your shares of Apple.

You receive $5210.36.You originally invested $4500.12.

You gained $710.24 dollars in 35 days, which is $20.29 a day for doing nothing but invest in stocks.

Specific Example #2

Let’s say you decided to buy shares of Apple on September 9th.You buy 10 shares of Apple for $506.17 each.The total amount you invest in is $5060.17.

Specific Example #2

You want out of Apple because they’ve been steadily decreasing.You buying out on September 16th is a terrible idea because it’s the lowest the stock has ever been.

It’s selling at $450.12 per share, when you initially bought it at $506.17.If you were to sell out now, you’d lose $560.05 total.

Works Cited

• http://finance.yahoo.com/education/stocks

• http://stocks.about.com

• http://www.investopedia.com/university/stocks/