Basic Stock Info
What is the stock market?
A stock market is a place where stocks are bought and sold.
What is the difference between an ask and a bid?
The bid is the highest price a buyer is willing to pay for a stock.
The ask is the lowest price a seller is willing to accept for a stock.
What do you get with common stock that you don't get with preffered stock?
Common Stock
Gives ownership in a company and voting rights at shareholder meetings.
What does the “value” of a stock mean?
How much the stock is worth right now
What is the risk of using a limit order when the stock price never reaches your target?
The risk of using a limit order when the stock price never reaches your target is that your order may never be executed.
Why do people buy from an index fund (like S&P 500)?
You invest in many companies at once, not just one stock.
What does historical prices mean? How does this help you?
They record past data including the open, high, low, and close prices for each day.
Helps investors analyze trends and predict future movements.
What type of stock pays steady income to investors?
Dividend stock
Why might two stocks in the same industry have different values?
One company may have higher profits, faster growth, or better financial health than the other.
Companies with experienced management and clear growth strategies are often valued higher.
Investors’ opinions about a company’s brand, product quality, or risk affect its value.
If you want to buy a stock immediately, which type of order should you use? Why?
A market order executes right away at the current market price.It prioritizes speed over price, so you are guaranteed to get the stock quickly.
What does diversification mean?
Don’t put all your money in one stock. Spread across sectors to reduce risk.
What does forward dividend mean?
The forward dividend is an estimate of the total dividend you’ll receive in the next year if you buy the stock today.
What type of stock has well-established, large companies with a history of reliability?
blue chip stock
How do dividends affect your ROI?
If a stock pays dividends, you earn cash even if the stock price doesn’t increase.
These dividends are added to your overall return when calculating ROI.
What does S and P 500 stand for?
Standard and Poor
Name 4 different industries involved in the stock market.
Tech
Healthcare
Financial
Consumer Staples
What is the difference between stock and dividend?
Stock = the “piece of the company” you own
Dividend = the “bonus cash” the company gives you for owning
What type of stock grows faster than average?
Growth stock
If a company’s stock value drops sharply due to news, but you believe in its long-term growth, how could your ROI change if you hold the stock for years?
A sharp drop in stock price decreases the value initially, which lowers your ROI.
If the company recovers, the stock price can rise above your purchase price, increasing ROI.
Why might an investor choose an S&P 500 ETF instead of buying individual stocks from the index?
An S&P 500 ETF gives you exposure to all 500 companies in the index with a single purchase.
Buying individual stocks would require a lot of money to own a meaningful portion of all 500 companies.
What industries did our guest speaker recommend?
Energy and Consumer Staples
What is an ex dividend date?
A stock is called ex-dividend on a specific date set by the company.
If you buy the stock on or after the ex-dividend date, you do NOT get the next dividend.
What type of stock is Tesla?
Growth stock
You bought 10 shares of a stock at $50 each. After 6 months, the stock is $60. What is your total ROI?
$600-$500=$100
How does the performance of the S&P 500 reflect the overall U.S. economy?
indicate investor confidence and business health