Stock Market

English 10 Isabella Guyer

Topic project 05/01/19

The stock market is a very interesting thing that affects many people’s individual

economics and the country’s economy.But how does this stock market affect the average

individual? Many peoples retirement accounts are invested heavily invested in the Stock Market.

The average adult might not own stock directly but through their retirement accounts they are

indirectly affected by the stock market success. When people invest in publicly owned

companies they become owners of a the company. For example when an investor buys a share

in a company he/she is buying a share of the profits. This does not give the owner the right to

manage the company or some form of discount. When they buy a share they receive a voting

right for each share they own. They have the right to vote on issues that affect the board of

directors decisions. So if you like to take risks, then think about investing in the stock market

because it is the ultimate risk because you can either make millions or lose everything.

Many different variables affect the stock market including sports, government, politics

and how well the company performs.When a company increases their earnings each quarter of

the fiscal year the company becomes more desirable to own. This creates a demand for the stock

and the price of the stock usually increases. If the company experiences losses the stock will

usually reacts the opposite. The demand for a stock is not as strong because they have

experienced losses and the owners of the stock might decide to sell the stock and that usually

results in the stock price decreasing. For example, Walmart is owned by the public . This means
that when people buy shares of Walmart stock they own a portion of the company. The price of

each stock depends on how well the company is performing. So the better the company is

performing the higher the price per share, but if the company is performing worse than it was a

few days ago the price would be less per stock then it was a few days ago. So when you invest

your money into the stock market and buy stock that is doing well then each share you bought

will be making money because the price went up. So as an example if you buy a stock of

Walmart and each share is $200 and you buy 10 shares, you spend $2,000. Then if the company

did so well and the share price is $300 now then when you sell your stocks if you do each stock

is now worth $300 so you would end up getting your $2,000 you paid for the stocks back along

with an extra $1,000. The stock market can change very quickly so even if you are up by a lot, a

matter of hours can cause you to lose all of your investments.

Public companies often list shares of their business in order to get money or continue to

grow their business. Then investors start to buy and sell stocks in order to keep in the supply and

demand list Since technology has evolved so much the stock market can now be done through

the internet with the help of some very important buildings around the world. In the past the

stock market took place in a building that you had to visit in order to buy and sell stocks. The

oldest and largest stock exchange is called the the (NYSE) New York Stock Exchange. The

NYSE is located in New York City at Wall Street. The DOW (Dow Jones Industrial Average)

The Dow Jones Industrial Average(DOW) is made up of 30 large publicly owned companies

According to ​Stock Anna- Louise Jackson.​ Some of the companies recognized by investors are

Apple, Exxon Mobil, Coca-Cola, Walmart, Verizon, Visa, Nike, McDonald’s and the Home
Depot. The DOW was created by Charles Dow in 1896 and is most known in the U.S. stock

index. In the stock market there is more than 5,300 common stocks involved. The DOW may be

the first stock you see on the list, but there are also disadvantages that come with it. Like how the

price weighting can have more effect on the stock than it would on others. The DOW is the main

stock in the stock market (Rosevear).

In stock markets there are two main ways to make money through capital gains and

dividends. A capital gain is “ … in which the value of each share increases in value”(Beers).

And a dividend is “... in which companies pass on on income to investors”(Beers). You can also

make money by investing in bonds, forex, derivatives and physical assets. A bond is a debt

instrument to help to raise capitals. The government and financial intermediaries use these often

as well as bills,notes, and certificates of deposit. And lastly a physical asset is the purchase of

certain things such as metals, jewelry, real estate, cattle,and more. Basically the investor wants to

sell the thing for more than they purchased it. Their are are also sectors in the stock market that

break down into Energy, materials, Industrials, consumer discretionary, consumer staples,

healthcare, Financials, information technology, utilities, real estate and telecommunication

services. There are many things you should research before investing in the stock market,

according to Brian Beers.

A Stock trader salary can differ greatly. The Bureau of Labor Statistics puts stock

traders under the category of “Securities, Commodities, and financial services sales agents”. In

May 2011 the average of their annual salary was close to $99,000 per years, while the median

was $72,000 a year. The mean salary for financial analysts is $84,300 a year or $40.53 per

hour.Now a stock trader’s yearly salary depends on their commision based on their client base.
There is a big difference between stock brokers and stock traders. Stock brokers are the people

help investors buy and sell stocks by searching for buyers and sellers and helping them find

agreeable price. A stock trader is the person that buys stocks and sells them for a bigger gain in

the end. This is according to the website article What is a stock Trader’s salary by Forest Time.

The stock market can be affected by sports and other variables. In this source the author

states, “winning rivalry games is found to be associated with higher stock returns”(KvD) While

it also says, “...media attention will reduce the local stock returns in the case of winning games

for NBA and NHL”(KvD). Sports do affect it minimally. That was found on the website article

Game day effect on stock market: Evidence from four major sports leagues in US with no author

listed. On the other hand politics greatly affect the stock market. Some of the big factors are

presidential elections, interest rates, inflation, policy changes, war, and the economic outlooks. It

has been researched that the year after a presidential election the financial market seems to

decline. History has shown a mostly positively changed when a Democratic president is in office

rather than a Republican president. The DOW has a return of 82.7% while a democratic

president was in compared to a 44.7% return when a republican president was in office. While

this is interesting, what is even more intriguing is the fact that for policy changes you have to

wait one year to see the effects it has on the market. Republicans have a higher return rate than

Democrats after a one year wait after a policy change. According to ( How do Political

Conditions Affect the Stock Market by KvD). Politics have a much greater effect on the stock

market then sports do

The stock market has high and low points. There has been 5 main stock market crashes in

history. The worst stock market crash in history occurred on October 19, 1987. There was a -
22.61% decline. This day is known as “Black Monday”! It started in Hong Kong, spread to

Europe and then to the US. The second largest crassh occured on October 28, 1929 which is

called “The Great Crash” because it also started the 12 year long great depression. There was a

12.82% change. The third largest crash was the day after the October 28th crash there was a

11.73% change in the market. Then there was the crash on November 6th, 1929 only a week

after “The great Crash” the loss was 9.92 %. The last major stock market crash occurred on

December 18, 1899 and was during the panic of 1896. The change was -11.99%. This was found

on the website article These are the 5 biggest stock market crashes in US history by Fiza Pirani.

The Dow Jones Industry highest closing average occurred on October 3rd, 2018, the record was

26,828.39. That day also broke the previous record set that year on January 26th, 2018 the peak

was reached the market went into free fall and dropped 4% the next week. On February 8th, the

stock market went into ​market correction​ and it fell to 23,860.46. After 6 months, on August 27,

2018 the market was back at 26,049.64. According to Dow Highest Closing Records by

Kimberly Amadeo.

It was the largest correction in history since the one in 1961. The stock market has high

and low days. In order to study the stock market I entered a game version of the stock market.

My father is a business teacher and set it up for me. My dad and I each had $100,000.00 in

buying power. The rankings right now have me in first place with my total value being

$102,627.86 and my dad has $100,622.04. The stocks that I bought I researched before buying

so that I could see the rising and declining of the stocks in the last hour, last day, last week, last

month, last year, and the last 3 years. I bought 14 Amazon stocks and when I bought them they

were worth $1,691.58 per stock and are now worth $1,797.27 pet stock. I also bought 50 Netflix
stocks. When I bought them they started at $359.30 each and went up to $375.22. I also bought

200 Nike stocks and when I bought them they were at $85.94and went up to $188.16. I did buy

one more stock, but it started at $182.23 and went up to $188.16. I did buy one more stock, but

it started to go downhill so I sold it before I lost anything. The stock market can change

drastically and can change the increase and decrease of the stocks in minutes based on many

different factors.

Many stocks do well for a period of time, but not a lot stay at the top. There are top 10

best stocks in the last 10 years. The # 3 worst stock is Chesapeake Energy which has a market

value of $4.9 billion and has a 10 year change of -78.8%. The #2 worst stock is Transocean

which has a market value of $5.1 billion and a 10 year change of -83.2%. The number 1 worst

stock is Weather - ford International that has a market value of $671.8 million, but a 10 year

change of -93.7%. This was found from the website article The 10 Best (And 10 Worst) Stocks

of This 10-Year bull Market by James Brumley. The market value is taken by multiplying the

number of outstanding shares by current share prices. This is based on the website article

Market Value Definition reviewed by James Chen. The percent change means to subtract the

price you sold the stock for from the price you initially paid. Then divide the gain # by the

original investment. Then multiply your # by 100 to get your percent change in your investment.

On the website article How to Calculate the percentage Gain or Loss on all Investment by

Investopedia staff, this information was found. There are many stocks that never did well at all.

Now let’s talk about the top 3 stocks in the last 10 years. The # 3 best stock is Ulta

Beauty which has a $18.5 billion market value ans a 10 year change of 7,184.6% The stores sell
cosmetics and hair care products. The #2 best selling stock is Exact Sciences with the market

value is $10.8 billion and has a 10 year change of 10,870. 5%. This company makes cancer

diagnosis tools. The #1 best stock is Jazz the company had many new drugs Pharmaceuticals

which the market value is $7.7 billion and the 10 year change is 23,26.6%. The company had

many new drug ideas and kept going with it and they then bought market rights in the

North/South America. That was found from the website article The 10 Best (And 10 Worst)

Stocks of This 10-Year bull Market by James Brumley. Those are the top 3 best stocks in the last

10 years.

Many people have different techniques to investing in the stock market. There are short

term and long term techniques as well. One short term technique is called day trading which is

when people look to see if a stock is starting an increase and they buy in. Then when it gets to

the highest point, people might sell. Another technique is option trading. Option trading is when

you say I will pay this amount now and this amount later if I end up wanting it. It is when you

want to purchase the stock at a particular price point. This is from the website article Short- Term

Stock Market Investing Techniques and no author was provided. Some tips to remember are to

check your emotions, pick companies: do not pick stocks, plan ahead, build up stock positions,

avoid over trading. This is found from the website article 5 Investment Tips for Stock Market

Investors by Dayana Yochim. There are also some long term techniques you can use as well.

One long term technique is Riding a wimmer thich is when you hano on to the stocks and ride

their winning streaks. There is also the technique of selling a loser which is when you really

understand when your stock is done. You should also stay away from Penny Stocks, focus on
the future, be open minded. A smart tip would also be talk to talk to a financial advisor, keep

and eye on taxes, and focus on long term. You should never base a stock over a short term

increase/decrease and you should never chase a rising stock because it won’t rise forever. Once

you have a plan you should always stick with it. Taken from the website article 10 Tips for

successful Long-Term Investing by Investopedia staff.

There are many high and low price stocks. In 2018 the top 5 highest priced stocks were

Berkshire Hathaway, Lindt, Sprungli AG,, Next Pic, Seaboard Corporation, and NVR Inc.

Berkshire Hathaway is a #1 with a $303, 100.00 per share. Lindt and Sprung AG are second

with $72,037.79 per share. Next Pi holds the #3 spot with $6,553.89 per share. Seaboard

Corporation was right behind them with $4,019.26 per share. NVR Inc. takes the #5 spot with

$2,900.02 per share.This is found on the website article Top 10 Most Expensive Stocks In The

World: From Chipotle To Berkshire Hathaway and no author was provided. There are also the 3

cheapest stocks. Trivago has a share price of $5.29 while DOVA (Dove Pharmaceuticals) has

$8.69 per share. Barclays PLC ADR (BCS) has $8.69 per share. This is found on the website

article 4 Low-Priced Stocks Under $10 for 2019 by Aaron Levitt. In one day there is 1.46 billion

shares traded. There is approximately 2,800 companies in the stock market. That is found from

the website article New York Stock Exchange: Company Listings with no author given. There is

a difference between the Dow and Nasdaq. The Dow is basically saying how well the stock

market is doing. The Nasdaq has 2 meanings. The first meaning is it refers to the National

Association of Securities Dealers Automated Quotations exchange which is the electronic way

that had investors buy and sell faster and computerized. The second meaning is a statistics of a

portion of the stock market. Both the Dow and Nasdaq refer to a mathematical average, but the
Nasdaq refers to an exchange where investors buy/sell stocks. According to the website article

The Dow vs. the Nasdaq: What’s the difference by Investopedia staff.

Every major country has a market. There are the top 10 ranked by total market

capitalism. The first is the New York State Stock Exchange (NYSE) and the second is the

Nasdaq. The third id the Tokyo Stock Exchange (Nikkei 225) and the fourth is the London

Stock Exchange (FTSE 100). The fifth is Euronext and the sixth is Shanghai Stock Exchange.

Seventh is the Hong Kong Stock Exchange (Hang Seng), the eighth is the Toronto Stock

Exchange (SPTSX). The ninth is Bombay Stock Exchange (SENSEX) and the tenth is the

National Stock Exchange of India (NSE Nifty). This was found on the website article Stock

Market: Definition, Major Markets by Kimberly Amadeo. One of the most important stock

market buildings is the AMEX in New York. This building was built in 1921 and is the former

headquarters of the American Stock Exchange. It is a National Historic landmark and found in

the Financial district in Lower Manhattan. Based the website article American Stock Exchange

Building by Wikipedia. The stock market is a very complex idea and is growing every day.

People from all over the world are involved in it and it includes companies from all over

the world as well. Before investing in the stock market you should talk to investors, your banker,

adn different brokers. You should also do a lot of research on how you want to invest and in

which specific stocks that you are interested in. There are many parts to the stock market

including people, prices, and places. You should always look into long term and short term

techniques while investing in the stock market. You should check politics at the time to see if

there will be any dips or raises in the market. So if you are up for that risk, and to receive the

same thrill you get with gambling, a scary movie, or even before skydiving, because it can either
make or break your economical life and even your real life. Before investing in the stock market

you should do some research because this it is a very important decision to make in any financial

situation.

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