Investing for Beginners
Why Invest? Give a reason
Cash loses its value
Prepare for the future
Gain wealth, financial well being
How are prices set in a stock market?
auction, buyers and sellers compete on price
Earnings = Revenue - Expenses
Lowest team trades score with highest team.
Trade scores ... lead to last
Walter White's first cook partner
Jesse Pinkman
What is Compounding?
Instead of taking out your earnings, you reinvest to earn on the earnings
How do individuals transact on exchanges?
Use brokers to buy and sell
What are the characteristics of Value Companies?
•Characteristics:
• Mature, established businesses.
• Generate consistent income relative to share price.
• Low growth potential but stable performance.
• Examples:
• Walmart, Coca-Cola.
• Long-term stability and dividends.
• Often have low P/E ratios.
What is an ETF, and how does it work?
• ETFs (Exchange Traded Funds) are
investment funds that hold assets like
stocks, bonds, commodities, or other
securities.
• Traded on stock exchanges like
individual stocks.
Walter White's alias
Heisenberg
Why Diversify?
To manage risk, while maintaining earnings
What are brokers and what do they do?
A broker is a firm facilitating
financial transactions for a fee.
What are the characteristics of Growth Companies?
• Characteristics:
• Mature, established businesses.
• Generate consistent income relative to share price.
• Low growth potential but stable performance.
• Examples:
• Walmart, Coca-Cola.
• Investor Focus:
• Long-term stability and dividends.
• Often have low P/E ratios.
What is an Index Fund and how does it work?
An index fund is a type of investment fund that aims to mirror the performance of a specific market index, like the S&P 500, by holding a basket of securities that represent that index, offering diversification and passive management
Name 5 of the 11 sectors
What does IPO stand for?
Initial Public Offering
Bonus Question ... share the 400 points with another team
200 for your team
200 for another team
Who decides on issuing dividends?
The Board of Directors
Give 200 points from your team to another team.
minus 200 for you, plus 200 for another team
What is the Primary Market, and the Secondary Market?
Primary -- large investors buy IPOs
Secondary -- shares are exchanged among all investors
Name at least three parts of a Candlestick Chart
• Open Price: First trade of the period.
• Close Price: Last trade of the period.
• High & Low Prices: Highest and lowest
trade prices during the period.
• Color Codes:
• Green: Close price > Open price (uptrend).
• Red: Close price < Open price
(downtrend).
How do you do Fundamental Analysis?
Study earnings, growth, competition, economic factors, market trends
What is passive investing vs active investing?
Passive investing aims to mirror a specific market index (like the S&P 500) through index funds or ETFs, while active investing seeks to outperform the market by actively selecting investments and managing the po
Top-Down Approach vs Bottom-Up Approach
Top-Down Starts from the broader market perspective
and narrows down to specific securities.
• Opposite of the bottom-up approach,
which focuses on selecting individual
stocks first.